Champions Wanted: Promoting Exports in the Middle East and North Africa

Abstract

This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

Not so different from non‐traders

“…The European Union, for example, maintains notably more NTMs than several MENA economies (and no more than Egypt, the region's economy with the most non-tariff-based restrictions) (Augier et al, 2012). 12 In addition, harmonization of standards with trading partners can induce greater exports and firm profitability, as Jaud and Freund (2015) found in the case of Morocco's harmonization with EU standards. On the other hand, NTMs can be selectively applied and used as further tools for protection.…”

“…The result has been a general lowering of tariffs on both sides of these relationships (Cieslik and Hagemejer, ). Yet, several tariff rates in the region remain high, and declines in tariff rates in the region have been less dramatic than elsewhere (Jaud and Freund, ). Moreover, tariff reductions have been at times selective, benefitting selected classes of firms (such as offshoring firms in Tunisia) or well‐connected firms with exclusive licencing in certain industries (such as telecommunications in Yemen) (Schiffbauer et al ., ).…”

“…By trade volume, the region's superstar exporters account for over half of the share of manufacturing exports, and on average, the single top manufacturer accounts for over 11 percent (Freund and Pierola, ) . What is more, this small handful of firms account for a great amount of the product diversity and are the ones that are able to reach more and further destinations; the remaining exporters largely only export one or two products and often to very near destinations (Jaud and Freund, ). Yet, those same ‘superstars’ competing abroad fail to have the market power to move much comparative advantage, as measured by firms’ ability to adapt their prices to exchange rate movements (so‐called pricing to market elasticity) (Asprilla et al ., ; Jaud and Freund, ).…”

“…However, it is necessary to look at additional trade variables before reaching that conclusion. 13 Jaud and Freund (2015) define superstars as the top 1 percent. Since that report uses administrative data and not a sample, a more conservative definition is used here to ensure sufficient coverage.…”

“… Jaud and Freund () define superstars as the top 1 percent. Since that report uses administrative data and not a sample, a more conservative definition is used here to ensure sufficient coverage.…”