Trade Asymmetries in the Mediterranean Basin

The paper examines the evolution of trade openness implications in the Mediterranean basin countries with respect to the European Union's trade initiatives, using a series of unconditional and conditional convergence tests. Accounting the endogeneity and instrumenting the spatial geography, evidence show that trade policy convergence fluctuates dynamically depending on the country, business cycles and specific economic and political events. The results reveal that fewer than a handful of the Middle East and North African countries exhibit significant trade policy convergence following the European Union's 1995 free trade convention. In contrast, the bigger picture of their European Mediterranean counterparts portrays an impetus for convergence