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An applied general equilibrium model with oligopoly and scale economies, basedon detailed plant-level data, is used to contrast the impacts of the Moroco-EU freetrade area (FTA) to multilateral trade liberalization on Morocco’s economy.Simulation results show that the FTA agreement is likely to have adverse effects onMorocco due to: (a) deteriorating terms of trade, (b) reductions in output per firmin industries dominated by scale economies, (c) diversion of imports away fromrelatively low cost, non-EU suppliers, and (d) potentially adverse effects on theaggregate demand for labor which could exacerbate already high levels ofunemployment. We contrast this FTA with a multilateral liberalization scenarioalong the lines of those proposed under the Doha Development Round and find thisto be more beneficial to Morocco, despite the associated income transfer from theEU to Morocco. The difference may be attributed to: (a) lesser terms of trade losses,(b) positive scale effects, (c) non-preferential liberalization of imports into Morocco,and (d) a positive impact on aggregate labor demand and hence unemployment. Weconclude that Morocco would be better off pursuing trade liberalization in themultilateral arena.JEL classification: F12, F14, F15A Comparative Analysis of the EU-Moroco FTA vs. Multilateral Liberalization 497