Arab Society in Revolt: The West's Mediterranean Challenge by Cesare Merlini & Olivier Roy

Author:Cesare Merlini & Olivier Roy [Merlini, Cesare & Roy, Olivier]
Language: eng
Format: epub
Tags: International Relations, European, Diplomacy, Middle Eastern, Political Science, World, General
ISBN: 9780815723974
Google: 0OlTSZ-RGiwC
Goodreads: 19057423
Publisher: Brookings Institution Press
Published: 2012-06-20T00:00:00+00:00

Sources: World Bank and International Monetary Fund databases.

a. FOB = Freight on board; n.a. = Not available.

As the trade and FDI numbers illustrate, the economic links to Europe are particularly strong in the case of Algeria, Egypt, Morocco, and Tunisia. Moreover, the tourism industry (which accounts for more than 10 percent of employment in Egypt, Morocco, and Tunisia) is also significantly driven by European demand.

Economic Agreements

The modern history of trade and related economic agreements between MENA countries and Europe goes back several decades. The first generation of trade agreements focusing on exports of some manufactured products from selected MENA countries to the EU was signed in the 1960s. In 1972 the European Commission launched the Global Mediterranean Policy, which resulted in a series of cooperation agreements involving preferential access for industrial and agricultural products, although the latter remained constrained by trade restrictions associated with the Common Agricultural Policy. The cooperation agreements encompassed not only MENA countries (Morocco, Algeria, Libya, Tunisia, Egypt, Jordan, Lebanon, and Syria) but also Israel, Turkey, Cyprus, Malta, and the former Yugoslavia.23 These agreements were further modified over the years—reflecting the EU's southern enlargement in 1986—but continued to entail unilateral tariff reductions from the EU to partner countries (the exception being Israel, which negotiated reciprocal concessions) to the extent that by 1993 the main market access restrictions to the European markets were the existing nontariff barriers under the Common Agricultural Policy.

By 1995, however, EU and MENA countries decided to pursue an even more ambitious integration process, launching the Euro-Mediterranean Partnership, often referred to as the Barcelona Process (as it was launched at the Euro-Mediterranean Conference of Ministers of Foreign Affairs held in Barcelona, November 1995).24 It represented a change in strategy reflecting not only growing concerns from Mediterranean countries about preference erosion in view of new economic agreements between the EU and Eastern European countries, but also the objective of pursuing deeper market integration beyond trade. The Barcelona Process envisaged further cooperation in three main areas: political and security relations, economic and financial agreements, and social and cultural partnerships. The ultimate goal on the economic front was the creation of a Euro-Mediterranean Free Trade Area by 2010. The main novelty in this context was the idea of replacing the existing system of nonreciprocal preferences with bilateral free trade agreements. These trade agreements were supported by grants to projects under the Mesures d'Accompagnement program and by loans from the European Investment Bank. Moreover, the Euro-Mediterranean Association Agreements (EMAAs; the bilateral FTAs) were expected to be complemented by intra-MENA trade liberalization.

Table 6-2. MENA Trade Indicators, Various Years, 1995–2010a

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