1. Trade aspects of the Euro-Mediterranean Policy

2. Summary of presentation
The context: from the Barcelona Process to the European Neighbourhood Policy and the Union for the Mediterranean
Trade aspects of the Euro-Mediterranean policy
The Euro-Mediterranean Free Trade Area beyond 2010 2

3. From the Barcelona Process to the Union for the Mediterranean
EU established privileged preferential relations with Mediterranean partners
 Regional approach to bring stability : Euromed Process combined + bilateral instruments: Association Agreements.
 10-year old Barcelona complemented with ENP and the Union for the Mediterranean
: Euromed partners
2004: launch of the European Neighbourhood Policy
2008: launch of the Union for the Mediterranean

4. The European Neighbourhood Policy
Developed in 2004 for the new neighbours of the EU following enlargement.
Main objective: an area of stability, prosperity, democracy and peaceful solution of conflicts.
Objectives in the trade and economic fields:
Offer a stake in the EU internal market
Support convergence towards the EU “acquis” with new financing packages (ENPI instrument)
Main instrument: Action Plans
Flexible, multi-sectoral and country specific instruments based on reciprocal commitments.
Aim at facilitating regulatory approximation (“within the border” instead of “at the border cooperation”).

5. Euro-Mediterranean trade relations
Main objective: a full regional Free Trade Area by 2010.
A network of North-South and South-South FTAs
Enhancing economic integration beyond trade liberalisation, i.e. creating a common regulatory platform amongst Euromed partners
Instruments: Euromed Association Agreements and ENP Action Plans
Yearly Trade Ministerial meetings

6. Euro-Mediterranean trade relations
Association Agreements concluded with most Euromed countries
Liberalisation of industrial goods and of certain agricultural, processed agricultural and fishery products
Basic commitments on regulatory areas
Rendez-Vous clause for services
Action Plans
More detailed commitments on regulatory areas
Objective: stake in the internal market
Basic idea: convergence towards the EU acquis

7. Trade liberalisation: achievements so far
The EU is 1st trading partner of Mediterranean countries
Mediterranean partners (without Turkey) account for 5,2% of overall EU trade in goods
 Trade in goods: €244 billion in 2010.
Med exports to EU increased by 11%/year and Med imports from the EU by 8%/year ( ).
Trade in services : Mediterranean partners account for only 5% of overall EU trade in services
= large potential.

8. Liberalisation of trade in goods
Through the Association Agreements
Duty-free access to the EU for Med industrial products and around 80% of agricultural produce
Progressive dismantling of industrial tariffs by Med countries and some preferences on agricultural produce (not fully reciprocating EU’s)
Through South-South FTAs (i.e. the Agadir Agreement, FTAs between Turkey and Med partners and FTAs between Israel and Med partners)
Med countries offer one another similar concessions to those granted to the EU in the Association Agreements, (with exceptions on agriculture)

9. NETWORK OF FTAs in the Euromed region

10. Downsides of the Euromed FTA
Med exports insufficiently diversified
- essentially energy (25%) and textile/clothing (30%)
South-south exchanges not yet liberalised : intra-med trade = 5-6% of total exchanges (the lowest rate in the world, compared to for example above 30% in Asia)
- economies not complementary?
- infrastructure bottlenecks and trade barriers
Lack of attractiveness of FDI (Meds attract 1% of EU outward FDI)
- Size of the market: lack of a regional integrated market
- Transparency and business environment to be improved

11. Review and simplification to follow
Adding dynamics to trading patterns: a new system of PanEuroMed origin cumulation
Common rules to allow cumulation of origin within the Euromed and beyond.
Main objectives: enlarged sourcing possibilities, incentive for investment and South-South economic integration
Regional convention on PanEuroMed preferential rules of origin agreed in 2011
Review and simplification to follow
However: proper implementation of the requires complete South-South FTA network and better awareness of operators.

12. The Euromed Free Trade Area beyond 2010
Liberalisation of trade in services and establishment
 Further liberalisation in agriculture, fisheries and PAPs
 Regulatory convergence: towards ACAAs
Deepening South-South economic integration
What next? The Euromed Trade Roadmap beyond 2010

13. Liberalisation of trade in services and establishment
A priority to achieve genuine FTA beyond free circulation of goods
Powerful leverage to stimulate reforms, improve business climate, attract FDI
Important potential economic gains expected
Services = 60-70% GDP in Med countries
whereas Med = only 5% of overall EU’s trade in services

14. Liberalisation of trade in services and establishment
Principles
Compatibility with WTO rules (art V GATS)
Regional integration
Development dimension
 Bilateral negotiations launched in 2008 with MOR, EG, TUN, ISR
 Objective: improve market access and eliminate restrictions to trade in services and establishment.

15. Deepening trade liberalisation in agriculture, PAPs and fisheries
Key sector for Mediterranean countries
 Ambitious negotiations based on a regional approach:
Aiming at liberalising bilaterally all trade except for a few sensitive products
Accompanied by cooperation programmes on rural development and optimisation of quality production
 Negotiations concluded with Jordan, Egypt, Israel and Morocco, Palestinian Authority, on-going with Tunisia

16. Objectives: provide direct access to the EU market (reciprocal)
Approximation of technical legislation, standards and conformity assessment
Objectives: provide direct access to the EU market (reciprocal)
How : progressive alignment and upgrading of quality infrastructures in priority sectors, followed by negotiation of agreements on acceptance of certain industrial products
1st Agreement signed with Israel in 2010, others in preparation in Morocco, Tunisia.

17. Deepening south-south economic integration
to achieve a fully fledged Euro-Mediterranean Free Trade Area
to increase the economic potential for the South Mediterranean region (which could become a large open and integrated market)
South-South FTAs network to be enlarged geographically and in scope, to follow negotiations between the EU and Mediterranean partners (e.g. services, regulatory convergence, etc)

18. The Euromed Trade Roadmap beyond 2010
Euromed Trade Road Map beyond 2010, main elements agreed in December 2009
Main objectives:
Enhance economic integration and diversification
Develop Euro-Mediterranean trade flows and EU investment in Southern Mediterranean countries

19. The Euromed Trade Roadmap beyond 2010
Main elements:
short term : concrete initiatives to bring the Euro-Mediterranean trade partnership closer to business :
A Euromed mechanism to increase transparency on market access and investment opportunities in the region
Ensuring better participation of business in definition of future Euromed trade agenda, etc.

20. The Euromed Trade Roadmap beyond 2010
long term : move to a deep and comprehensive Euro-Mediterranean Free Trade Area, through:
Liberalisation of trade in services and investment
Stronger legal commitments aiming at extending the EU internal market in regulatory areas: SPS, TBT, trade facilitation, intellectual property rights, competition rules, public procurement…

21. The response to the « Arab Spring » of 2011
More market access, trade integration
short term : accelerate/conclude on-going negotiations in agriculture, services and establishment, conformity assessment
+ deliver on improved rules of origin
long term : deep and comprehensive free trade areas = progressive closer integration with EU single market

22. Conclusions
Economic development + job creation critical to successful transition in Euromed region
Trade and investment relations can further grow and develop.
EU willing to offer more market access, + trade integration + foster regional integration.

23. For more information
MERCI !