Some Economic Effects of the Free Trade Agreement Between Tunisia and the European Union.

We use a special constructed version of the Michigan Brown-Deardorff-Stern (BDS) Computational General Equilibrium (CGE) Model of World production and Trade to estimate the potential economic effects on the Tunisian economy that may result from the free trade agreement (FTA) between Tunisia and the European Union (EU) that was concluded in July 1995. We find that the static welfare benefits for Tunisia of the FTA range from slightly negative to somewhat positive, depending on what is assumed about intersectoral capital mobility in Tunisia.