IMPACT ON WORKERS OF REDUCED TRADE BARRIERS - THE CASE OF TUNISIA ANDMOROCCO

In 1995 Tunisia and Morocco committed themselves to a 12-year time-fra me for dismantling their trade barriers against manufactured imports f rom the European Union - a step towards constructing a Euro-Mediterran ean Economic Area. Drawing on existing research, trade theory and empi rical evidence, Boughzala presents a stylized model to explore the lik ely impact of this move on the two countries' labour markets. Wages fo r unskilled labour will at best not fall, but net job creation could b e substantial if the dynamic effects of trade liberalization attract f oreign direct investment into competitive sectors and expand more skil l-intensive exports.