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Integrating developing countries into the world economy: a Tunisian case study

Christian Ritzel (Agroscope, Ettenhausen, Switzerland)
Andreas Kohler (Agroscope, Ettenhausen, Switzerland)
Stefan Mann (Agroscope, Ettenhausen, Switzerland)

International Journal of Development Issues

ISSN: 1446-8956

Article publication date: 4 September 2017

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Abstract

Purpose

The purpose of this article is to provide empirical evidence about the potential positive effects of switching from given non-reciprocal trade preferences granted under the Swiss Generalized System of Preferences (GSP) for developing countries (DCs) to negotiated reciprocal trade preferences under a Free Trade Agreement (FTA).

Design/methodology/approach

In a case study of Tunisia’s exports to Switzerland, the authors apply methods of matching econometrics, namely, Propensity-Score Matching and Nearest-Neighbor Matching. Hereby, they are able to identify the average treatment effect on the treated.

Findings

Overall preferential exports increased by 125 per cent after the entry into force of the FTA in 2005 until the end of the observation period in 2011. Additionally, an analysis of the agro-food and textile sectors likewise indicate boosting preferential exports in the amount of 100 per cent.

Research limitations/implications

Case studies in this vein have their disadvantages. The greatest disadvantage is the lack of generalization. In contrast to studies estimating the potential effects of an FTA for several countries, the authors are not able to generalize their results based on a single case.

Practical implications

Because trade preferences under the Swiss GSP are offered to the country group of DCs as a whole, non-reciprocal trade preferences are not tailored to the export structure of a particular DC. By switching from non-reciprocal to negotiated reciprocal trade preferences, DCs such as Tunisia expect to negotiate terms which are tailored to their export structure as well as better conditions than competitors from countries which are still beneficiaries of the GSP.

Originality/value

To the authors’ knowledge, this is the first study to investigate explicitly the switch from non-reciprocal to reciprocal trade preferences using econometric matching techniques.

Keywords

Citation

Ritzel, C., Kohler, A. and Mann, S. (2017), "Integrating developing countries into the world economy: a Tunisian case study", International Journal of Development Issues, Vol. 16 No. 3, pp. 300-316. https://doi.org/10.1108/IJDI-05-2017-0059

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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