10 Alternative Trade Policies and Employment in Tunisia

Tunisia is a relatively small North African country that gained indepen-dence from France in 1956.l Since independence, it has had two distinct phases in its trade policies. In the 1960s it followed a clear import sub-stitution policy that, while resulting in a significant degree of industrial development, contributed little to employment generation. In the 1970s it has reversed its policy direction, liberalizing trade and providing some support for exports with the explicit goal of increasing employment op-portunities. These two phases of trade policies, coupled with a trade pattern oriented almost exclusively toward Europe, make Tunisia a rela-tively uncomplicated and interesting case study of the relationships be-tween trade strategies and employment. The focal year for my analysis is 1972. The reasons for this choice are two. The first is data availability, especially the existence of an input-output (1-0) table and a census of manufactures allowing us to estimate factor requirements of trade.2 The second is that 1972 is a tran