In the Barcelona Declaration (1995), the Euro-Mediterranean Partners agreed on the establishment of a Euro-Mediterranean Free Trade Area (EMFTA) bythe target date of 2010. The new generation of Euro-Mediterranean Association Agreements provides for the gradual implementation of bilateral free trade zones (FTZ). The Euro-Mediterranean Free-Trade Area foresees free trade in manufactured goods and progressive liberalisation of trade in agricultural products. It is therefore of interest analyzing the FTZ effects onfreight flows and on the national economy of the involved countries, bothfor identifying a list of priorities in infrastructural and service improvements of transport connection and for defining threats and opportunitiesfor European firms. An exhaustive analysis of the FTZ effects on the overall European economy has not been carried out yet, and the development of an input-output based simulation model at European level seems to be the key aspect for a thorough analysis of those economic impacts and for the identification of multiplicative effects as well as which good sectors may gain from this FTZ. A MRIO European model has been developed on the basis of macroeconomic data collected by several sources (Eurostat, National Bureaus of Statistics, International trade offices, World Bank and so on). Moreover, trade data between EU and FTZ involved countries, collected on the basis of sources available in those countries in the context of the FREEMED project, have been also used. It is worth mentioning that the Eurostat input-output tables for the EU countries provides information on the transport margins, which represent a modelling opportunity for integrating transport level-of-service attributes within the developed MRIO model. Transport level-of-service attributes for the study area have been in turn calculated through a transport supply model, which takes into account road and short-sea shipping, allowing calculation of the shortest travel time for each origin-destination pair. Valuation of travel time savings (VTTS) estimates available in the literature were then used for turning those times intomonetary values. The system of models has been therefore applied in the context of FTZ effects appraisal. In more detail, some policy scenarios, chosen among those provided by the FREEMED project on the basis of the analysis of the agreements between EU and third part countries involved in the EMFTA, have been simulated. For those countries, the increase in demand and/or in trade with reference to specific good sectors due to the FTZ was estimated. This was used as input for the implemented MRIO model. These analyses will indicate which countries will mostly benefit from FTZ includingin this analysis the multiplicative effects and identifying a list of priorities for supporting the corresponding increase in freight flows. For the covering abstract see ITRD E137145.
Abstract