The economic impact of the Euro‐Mediterranean free trade area on Mediterranean non‐member countries

Abstract

The new Euro‐Mediterranean Partnership will deepen the asymmetric trade interdependence between the EU and Mediterranean Non‐Member Countries. An even larger share of the latter's imports will originate in the EU displacing not only inefficient local producers (quite likely in the case of Morocco and Tunisia) but also non‐EU foreign suppliers (more likely in the case of Jordan or Egypt). This may have a negative effect on the income side of the Mediterranean Non‐Member Countries’ budgets (since tariff revenue will sharply decrease) and on their balance of payments (in terms of foreign currency spent on imports).The most promising feature of the new Partnership is its South‐South component provided that the plan allowing for the diagonal cumulation of origin rules is implemented.