Egypt-US and Morocco-US Free Trade Agreements

Abstract:
This paper provides an assessment of concluding free trade agreements between Egypt and the US; and Morocco and the US. It starts with an analysis of what makes each pair of countries good candidates for concluding an FTA, followed by an estimation of the likely benefits to the parties involved. The paper concludes that an FTA between Egypt and the US is in the interest of both parties. For Morocco, the expected net static economic gains from an FTA with the US are not positive, but that result could be reversed if the dynamic gains are large enough. Finally, the paper notes that the economic gains from FTAs for Egypt and Morocco require complementary policy reforms at home, while the political gains for the US depend on its success in resolving the Palestinian-Israeli conflict and the Iraqi problem.