Euro-Mediterranean Free Trade Research Articles

Regulating European Union’s Border in Africa

Ceuta and Melilla are two enclaves that belong to Spain in Morocco and have become the contact points of the irregular migrants coming from Africa that are attempting to reach the European continent. The enclaves have utilized innovative technology and barbed wire, but immigrant crises have occurred over the years. Despite the crises, the Spanish and Moroccan governments choose to perform a semi-permeable border. This article explains the semi-permeable border using the liberal institutional theory. This article argues that a semi-permeable border is chosen by the Spanish and Moroccan governments to fulfill their mutual self-interests. The Spanish government agrees to perform a semi-permeable border to retain the symbolic border of the region. The blurring overlap in the enclaves has put the Spanish government to use help from the European Union to conduct security measures in the region. The Moroccan government agrees to perform a semi-permeable border to retain its influence over the enclaves and uses the immigrant crises as a bargaining chip for the European Union. The European Union maximizes the performance of a semi-permeable border to pursue its interest, which is to conduct the Euro-Mediterranean Free Trade Agreement.

PROSPECTS FOR THE DEVELOPMENT OF THE ARAB-EUROPEAN ECONOMIC RELATIONS ACCORDING TO THE MODEL OF COMPARATIVE ADVANTAGE (COUNTRY’S EXPORT SPECIALIZATION IN SPECIFIC PRODUCT GROUPS)

The article shows that the development of globalization intensifies international interrelationships and creates the conditions for the realization of the idea of determining sustainable Euro-Arab interregional space in the Mediterranean. That is the conclusion we have reached, is based on methodological arsenal of developers of models and strategies for global and regional development, which is based on modeling of various alternative scenarios of the development and selection of the most effective type of specialization. The index of revealed comparative advantage (RCA), the so-called Balassa index, which is preferred in the article, is very common tool for empirical analysis of foreign trade specialization and evaluation of advantages. Based on the calculations and relative volumes of exports of two groups of countries (EU and Maghreb) and on indices of revealed comparative competitive advantages of Balassa, the article shows that these countries have great potential for complementary development. Therefore, it may be stated that the model of EU cooperation with Mediterranean countries reflects the movement of actors to a certain maximum possible short distance for integration (the creation of comprehensive Euro-Mediterranean free trade area in long term).

Euro-Mediterranean relations and their heading. On the way to a differentiated multilateralism?

The European Union pays a primary attention to the development of neighbouring relations; it means the relations with countries in the immediate vicinity of its external borders. This is done for the sake of prosperity, stability and the spread of democratic values in the world. In this sense, a kind of the privileged region have always created the states of the Southern and Eastern or eventually Northern Mediterranean with which the European Economic Community began to develop cooperation immediately after its formation. Then since the mid-1990s, the EU set out a goal to create a Euro-Mediterranean free trade area and thus to move closer to the interlacing of the two entities in the form of integration. The outline of the process of development of Euro-Mediterranean relationships (including the changes of bilateral approaches and the conditioning factors) is the objective of this article. It is divided into three sections, which cover different stages of the development of these relationships over time and escalate in terms of two-way approaches to a new quality of cooperation (including the three stated research questions). The result of these relationships could become a Euro-Mediterranean Alliance that is outlined as a differentiated form of multilateralism in the conclusions of the paper.

The Euro-Mediterranean free trade agreement and the cost of tariff liberalization in Egypt

In this research, a regional intertemporal general equilibrium model is constructed to study the nature of the adjustment path to preferential trade liberalization between Egypt and the European Union. Aside from the dynamic gains from trade – higher growth and welfare – the Egyptian economy incurs adjustment costs along the transition to freer trade. However, these costs are relatively lower than those incurred under unilateral liberalization. Welfare is found to be higher if the implementation of the agreement is followed some time in the future with removing all remaining tariffs on imports originating from the rest of the world.

The Euro-Mediterranean Free Trade Area: an Evaluation on the Eve of the (Missed) Deadline

The Euro-Mediterranean Partnership (EMP), nowadays known as ‘the Union for the Mediterranean’, celebrates this year its fifteenth anniversary. The main goal of the EMP is creation of a Euro-Mediterranean Free Trade Area (EMTA) until 2010. However, this objective will not be met. This article provides an overview of the initiatives taken until now, and compares the objectives set in 1995 with the eventual achievements. Finding that there is a considerable delay in the progress regarding the EMFTA, this article analyses the underlying reasons for this delay. It focuses on the problems at the European side, difficulties in the relations between the European Union (EU) and the Mediterranean Non-Community Countries (MNCs), and the political and economic problems hindering the stimulation of intraregional trade between MNCs. In addition, also the role of other international actors like the United States, the Gulf Cooperation Council, China and Russia is highlighted. This article concludes that the EU’s nature as an internally conflicted and compartmentalized trade persona has hindered the EU of providing substantial incentives for MNCs. Due to this lack of incentives, the EU fails to convince some of its most important trading partners of the benefits of the EMFTA. Moreover, intraregional trade among MNCs remains a problem, leading to the conclusion that the relationship between the EU and the Mediterranean still can be best caracterized as a ‘hub-and-spoke’ relation instead of an inter-regional partnership. In addition, the intiatives of other international actors in the region interferes with the EU’s efforts to create a free trade area with the Mediterranean. This articles ends by offering suggestions to overcome the identified obstacles for the completion of a full EMFTA and to establish an inter-regional partnership.

Assessing the Impact of the EU-sponsored Trade Liberalization in the MENA Countries

The EU-sponsored Barcelona conference in 1995 set the ambitious goal of creating the Euro-Mediterranean Free Trade Area (EUROMED) that would include the European Union and the MENA countries by 2010. The intermediate steps towards building the EUROMED have involved bilateral "vertical" trade liberalization between the EU and the particular MENA countries as well as "horizontal" trade liberalization among themselves. In this paper we evaluate empirically the effects of the new EU Association Agreements with the MENA countries using the augmented gravity equations derived from a variety of neoclassical and new trade theory models and panel data for the period 1980-2004. We find that while these agreements increased significantly imports of the MENA countries from the EU they had no positive impact on their exports to the EU which can be attributed to the asymmetry in trade liberalization between the EU and the MENA countries.

The challenge of economic integration in the MENA region: from GAFTA and EU-MFTA to small scale Arab Unions

After a 30 years period of trials and errors in creating an Arab economic space for just independent countries and an insufficient implementation of the Euro-Mediterranean Free Trade Agreement (EU-MFTA), the economies of the MENA region have recently relied back on sub-regional trading blocks (Arab Unions) to succeed in opening and developing their economies. From a theoretical point of view this tendency is rising a debate on the possibility, for the Arab countries, to enjoy the dynamic effects that emerge from the internationalization process (like an increasing rate of investment, a higher intra-industry trade and reduced balance of payments distortions), given the structure and the performance of their economies. The aim of the paper is to present the contemporary trends of the economic integration process among the countries of the MENA Region in connection with the wider perspective adopted in the debate on this topic. A closer look at the intra-Arab flows of goods and services will thus enable us to appraise some facts concerning the process of internationalization of MENA economies, revealing an unexpected dynamism in the lights of “deep integration” perspective. On this base an account of the renewed bilateralism in economic relations will be provided.

Bridging the research gap between the Northern and Southern shores of the Mediterranean

Bridging the research gap between the Northern and Southern shores of the Mediterranean

SUSTAINABILITY IMPACT ASSESSMENT OF TRADE AGREEMENTS: FROM PUBLIC DIALOGUE TO INTERNATIONAL GOVERNANCE

In common with the governments of the United States and Canada the European Commission subjects its trade policy to a publicly conducted impact assessment process. The EC approach differs from the others in assessing economic and social impacts as well as environmental ones, in other countries as well as domestically. In principle this can contribute to stengthening international governance. In practice difficulties are encountered in integrating the studies into the decision-making process. This paper examines the experience that has been accumulated in the EC programmme, with particular reference to studies at the global level for World Trade Organisation negotiations and regionally for the Euro-Mediterranean Free Trade Area. These two examples offer pointers for how the impact assessment process might be adapted or extended to make a stronger contribution to international governance at both regional and global level.

A reform strategy of the energy sector of the 12 countries of North Africa and the Eastern Mediterranean

The development of an energy reform strategy based on the market economy so as to introduce competition in the market segments is of crucial importance for provision of a stable and favourable environment for energy investments. Reform strategies have begun developing in most of the 12 Mediterranean Countries of North Africa and the Eastern Mediterranean, especially in the context of the Euro-Mediterranean Free Trade Area. Even though energy sector reforms have been initiated, they are still at an early stage in most of these countries. The majority of energy utilities remain state owned, vertically integrated monopolies. Few of these countries have established energy regulators, and where they have, these institutions have many difficulties in effective development. In addition, competition is virtually absent from the sector, and private participation has been confined to independent power plants, which tend to be introduced into unreformed sectors. The aim of this paper is to propose energy reform strategies for the reform of the sector by 2010 in terms of the development of the regional oil, gas and electricity sectors in these countries.

The Social Impact of Euro-Mediterranean Free Trade Areas: A First Approach with Special Reference to the Case of Morocco

Extensive trade liberalization - mainly through the dismantling of all tariffs on European manufactured products - will be the most direct and concrete effect of the Euro-Mediterranean Partnership for Mediterranean Partner Countries (MPCs). This essay first undertakes an analytical review of the social impact of the creation of the Euro-Mediterranean Free Trade Areas (EMFTAs), taking into account their effects on employment, income (wages and otherwise), prices of consumer goods, state social expenditure and other economic variables. There follows a brief case study of the magnitude of the EMFTAs' social impact on Morocco. Finally, the study seeks to identify which national policies and which accompanying measures within the framework of the Euro-Mediterranean Partnership could be used to 'mitigate the negative social consequences which may result' from the EMFTAs and hence strengthen their social and political sustainability.

Spanish Investments in Morocco and the Process of Regional Integration

The creation of the Euro-Mediterranean Free Trade Area constitutes a big opportunity for Mediterranean third countries to integrate in the international economy. The big Euro-Mediterranean market that will unfold will not only intensify trade and investment flows into the Southern countries of the Mediterranean, but will also, as in all regional economic integration processes, signify a restructuring of the investments already made. This article studies the strategies of Spanish companies with industrial investments in Morocco in the light of the creation of the Euro-Mediterranean area, and the repercussions these strategies may have on employment.

The Euro-Mediterranean Free Trade Zone: Prospects and Possibilities

Petros Siousiouras is a lecturer in international relations at Aegean University, Rhodes, and a scientific consultant at the Institute of International Relations, Panteion University, Athens.

Agricultural trade and the Barcelona Process: is full liberalisation possible?

Summary The Barcelona Process has so far avoided full inclusion of agricultural trade in the Euro-Mediterranean Free Trade Area (EMFTA). Given the importance of agriculture in Mediterranean countries, an end to the agricultural exception would give an opportunity for the Southern Mediterranean Countries (SMCs) to reduce the adjustment costs of ‘reciprocity’ in bilateral trade with the European Union (EU). This paper reviews the measures that constrain the intra-regional agricultural trade. Southern European fears of the Mediterranean integration relate to ‘North–South’ asymmetries, including imbalances of Common Agricultural Policy (CAP) support among the EU regions. Rural development appears to be compatible with co-operative strategies to remove the political inertia regarding full introduction of agriculture in the Barcelona Process.

Inward Foreign Direct Investment in Maghreb Countries in the Framework of the Euromediterranean Partnership: The Missing Link?

One of the main expected benefits from the establishment of the Euromediterranean Partnership in 1995 between the European Union and 12 Southern and Eastern Mediterranean countries was sizeable increase in foreign direct investment into the latter. Moreover, FDI is a key link for the success of the overall development strategies implemented in those countries in the last 15 years, and to face the economic and social costs of the future Euromediterranean Free Trade Area. However, five years thereafter this FDI increase has not come forward in the Maghreb countries (Algeria, Morocco and Tunisia). The article offers an analytical framework of the drivers of FDI in Maghreb countries which allows us to explore its future evolution within different scenarios. The conclusion is that only market integration between the three countries and proactive FDI-promoting strategies complementing market liberalisation within the framework of the Euromediterranean Partnership could boost FDI levels in the region.

Promoting Development and Stability through a Euro–Mediterranean Free Trade Zone?

Promoting Development and Stability through a Euro–Mediterranean Free Trade Zone?

Les enjeux du rattachement des monnaies du Maghreb à l'euro

The stakes of Maghreb currencies peg to euro This paper investigates some of the stakes which weight upon Maghreb monetary strategies. The euro birthday and the perspectives of euro-Mediterranean free trade area constitute two opportunities which allow Maghreb countries to consider a revision in their exchange rate policies. The necessary modernization of financial and banking systems and the risk of maginalization facing East Oriental European Countries suggests a broader transparence of exchange rate policies. Starting from different peg experiences, we explicit the stakes of euro as an anchor for Maghreb currencies. We show that a nominal crawling peg presents a double advantage : not only it induces fiscal and monetary discipline, but also it does that without worsening foreign trade.