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How Migration Boosts Trade?




The most recent report by FEMISE members, published in April 2017, highlights the interaction between migration and the density of trade relations in the countries of the Euro-Mediterranean region. France and Egypt are the subject of a specific study attesting to the close imbrication between these two phenomena.



According to the study, immigrant networks have the effect of increasing trade between France and Egypt by between 10% and 20% (photo : F.Dubessy)
According to the study, immigrant networks have the effect of increasing trade between France and Egypt by between 10% and 20% (photo : F.Dubessy)
This is indisputable. The econometric analysis of Femise's experts twists and turns to the conventional wisdom about the impact of migrants on the economy of host countries.
The most recent FEM41-13 report  entitled "The role of vicinity linkages in the EU-Med region for trade growth : Focus on Migration, level of education, and social integration" demonstrates the positive role of the influx of migrants on the increase in the volume of trade between the country of departure and that of destination. According to the study, networks of immigrants present a clear capacity for giving rise to new trade exchanges with estimates of effects at 10%-20% of total trade exchanges for two countries under study.
 
 
Marseille, cosmopolitan city par excellence, maintains close and historical relations with Tunis and Algiers. In Sète, the importance of the Moroccan community justifies the exploitation of maritime links with the Kingdom. Migrants duplicate their consumption habits in the host country. These overlaps stimulate economies. This is why Femise advocates an emphasis and a modulation of the commercial policy of the States with regard to their migration strategy.
 
The report analyzes the case of France and Egypt. Hexagon, which had 7.6 million immigrants in 2013, has always had close historical ties with neighboring Maghreb countries. Of the 220 000 annual migrants recorded in France (between 2000 and 2013), 51% come from Africa. "Exports and imports to and from countries in the MENA3 zone (Algeria, Morocco and Tunisia) account for 8% of France's total trade," the document said.
 

Caution Towards Selective Migration Policies

How Migration Boosts Trade?
In the case of Egypt, which has 4 million immigrants around the world, the Femise study demonstrates the beneficial effect on the trade of host countries. 73% of Egyptian emigrants choose to settle in an Arab country and 13% in Western Europe. "By choosing to settle in a western country, they seek to evolve professionally while avoiding corruption, social prejudices in Egypt," the report states.

The co-authors Andrés Artal-Tur  and Vicente Pallardó-López, professors at the University of Valencia, and John Salevurakis and Mona Said professors at the American University of Cairo (AUC) highlight a number of variables influencing Bilateral trade relations between countries of departure and destination.
 
Thus, the profile of the migrant has an impact on the nature and intensity of trade. Their level of education, their professional activity, their level of language proficiency and their adaptability to the host country play a decisive role.


If the link between migration and trade is established, it seems legitimate to question the long-term impact of the rise in protectionism and the selective migration policies deployed by OECD member countries in recent months.
 
The full report is available to download by clicking on the link


Nathalie Bureau du Colombier, MARSEILLE


Tuesday, August 29th 2017


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