– French adage

Less than a twelvemonth after the constitution of the World Trade Organization ( WTO ) , the Euro-Mediterranean Conference of Ministers of Foreign Affairs, held in Barcelona in November 1995, was the starting point for the Euro-Mediterranean Partnership, besides known as the Barcelona Process.

The participants agreed to set up a comprehensive partnership between the member provinces of the European Union and states of the Southern Mediterranean, the Euro-Mediterranean Partnership ( EMP ) ( Barcelona10.org website, 2010 ) .

The partnership was organised into three chief dimensions:

a reinforced political duologue on a regular footing

the development of economic and fiscal cooperation

greater accent on the societal, cultural and human dimension

In add-on to the 15 EU members of 1995, the undermentioned ‘southern ‘ states agreed to the Barcelona declaration: Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, The Palestinian Authority, Tunisia and Turkey ( EU Website, 2010 ) .

After the European Union expansion of 2004, Cyprus and Malta become EU members, every bit good as 8 other states ( Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia ) .

Furthermore, Libya has observer position since 1999 and Mauritania acceded to Euro-Med partnership in 2007.

With the debut of the European Vicinity Policy ( ENP ) in 2004, the Barcelona Process basically became the many-sided forum of duologue and cooperation between the EU and its Mediterranean spouses while complementary bilateral dealingss are managed chiefly under the ENP and through Association Agreements signed with each spouse state.

The chief end of this paper is to look at the 2nd dimension of the EMP, particularly the development of economic cooperation and besides to analyze some of the issues and challenges it is confronting.

Euro-Mediterranean Free Trade Area

One of the of import determinations of the Barcelona Declaration was to set up a Free Trade Area ( FTA ) . The free-trade country would be established through the new Euro-Mediterranean Agreements and free-trade understandings between spouses of the EU. The parties had set 2010 as the mark day of the month for the gradual constitution of this country which would cover most trade with due observation of the duties ensuing from the WTO ( EU Website, 2010 ) .

However, the free trade country is still building since the Barcelona declaration ; it is known as The Euro-Mediterranean Free Trade Area ( EU-MEFTA ) .

To day of the month, all the Mediterranean states in the EMP ( except Syria ) have signed Association Agreements with the EU. Furthermore, Turkey is the lone state to hold signed a Customs Union Agreement ( January 1996 ) as it is candidate for accession to European Union.

To following table gives an overview about the Association Agreements signed to day of the month between the EU and the different spouses:

State

Status

Signed Date

Entry into Force

Algeries

Signed

April 2002

September 2005

United arab republic

Signed

June 2001

June 2004

Israel

Signed

November 1995

June 2000

Jordan

Signed

November 1997

May 2002

Lebanon

Signed

June 2002

April 2006

Maroc

Signed

February 1996

March 2000

Palestinian Authority

Signed

February 1997

Interim Agreement July 1997

Syria

Initiated

–

–

Tunisia

Signed

July 1995

March 1998

Turkey

Customss Union

March 1995

January 1996

Table 1: Agreement Signed Between EU and Mediterranean Countries.

Beginning: Adapted from the European Union Website, [ Online ] , available:

hypertext transfer protocol: //ec.europa.eu/trade/creating-opportunities/bilateral-relations/regions/euromed/index_en.htm

Union for the Mediterranean

The Euro-Mediterranean Partnership was seen as a failure by some, because it included all EU members, which distracted from purely Mediterranean issues.

In 2008, the Barcelona Process was re-launched as the Union for the Mediterranean ( UMED ) , following a more ambitious initial program suggested by French president Sarkosy. Initially, Sarkosy ‘s end was to make a brotherhood that would unify the involvements of Europe, the Middle East and North Africa, and besides to assist decide the Israeli-Palestinian struggle. Some believe that another major ground for Sarkosy ‘s program was to suggest an option for Turkey to go an EU member. After considerable dialogue, the programs for the Union have undergone many alterations, UMED became an establishment edifice on, but non replacing the EMP.

Some believe that the UMED will make no more than service as an umbrella organisation for the already bing Euro-Mediterranean partnership. It is far from the expansive vision of unity initial proposed by the optimistic Sarkozy ( Wisegeek Website, 2010 ) .

Positive effects of the EU-MEFTA

Increase trade between EU and Partner states

It is normally agreed the trade liberalisation improves productive capacity and efficiency ; committednesss by the spouses to the understandings are likely to heighten the credibleness of the reform waies pursued by the states involved ; and the understandings are likely to be really good in bring oning competition, promoting investings and diminishing dealing costs associated with trade.

Increase in trade between South to South members

The Barcelona Process has set an of import aim towards the creative activity of a free trade country by 2010, with well liberalised trade both between the EU and the Mediterranean part, but besides between the EU Mediterranean spouses themselves.

The launch of the Arab Mediterranean Free Trade Agreement ( known as the Agadir Agreement ) which was initiated in Agadir in May 2001 by the four Arab-Mediterranean states of Jordan, Tunisia, Morocco and Egypt was seen as a first edifice block. The understanding was signed in 2004 and came into force in July 2006 ( The Agadir Agreement Website, 2010 )

Furthermore, on 1 January 2005 the riddance of most duties among the Greater Arab Free Trade Area ( GAFTA ) members was enforced. The GAFTA was foremost created in 1998 and supersedes the Agadir Agreement. It includes 17 Arabic states including those of the EU-MEFTA and those of the Golf Cooperation Council, known as GCC ( Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates ) ( Bilaterals.org, 2010 ) .

Ease WTO accession

While many WTO member or campaigner states are in the procedure of implementing the duties associated with WTO rules, most states in the Mediterranean part have gone an excess measure by holding signed an single understanding with the European Union. The duties of these single understandings are frequently considered deeper than those of the WTO, hence the committedness of these states to implement the duties are expected to hold important impacts on them every bit good as on other states in the part ( Abdalla, 1997 ) .

To day of the month, the undermentioned states have non accessed the WTO and have observer position: Algeria, Libya, Lebanon and Syria. By implementing the demand of the EUROMED Partnership these states will acquire closer to run intoing the WTO entree demands.

Negative effects of the EU-MEFTA

Rules of beginning

Sing regulations of origin the current legal models of the understandings work against the end of making a free-trade country in the part since they do non let states that do non hold similar regulations of beginning to reason bilateral free trade understandings with each other.

Different intervention of industrial and agricultural merchandise

Some of the Mediterranean Partner Countries ‘ ( MPCs ) economic systems still rely on agribusiness. Excluding the agribusiness from the free-trade country can hold a detrimental consequence as this is one of the few sectors where they have a competitory advantage.

By contrast free entree to the EU market for many Mediterranean industrial merchandises has already existed since the cooperation understandings of the ’70s. Therefore the constitution of a FTA in industries under the EMAAs is an asymmetric liberalization procedure that entails the one-sided remotion of trade barriers for EU exports come ining the MPCs markets ( Salama, 2001 ) .

Besides harmonizing to Salama ( 2001 ) the effects of this opening-up of their domestic markets could show serious troubles for many of the MPCs. Without entree to allow engineering, human capital and finance they will stay uncompetitive with EU industrial merchandises. In the short term this may take to the riddance of chiefly little and average sized concern, with addition in employment rate.

Harmonizing to Nienhaus ( 1999 ) , the constitution of the Customs Union with Turkey illustrates this job with about 20,000 little and average sized endeavors shutting.

Decrease of gouvernments ‘ grosss

The MPC authoritiess will hold to happen alternate beginning of gross and engage in heavy reforms. If these authoritiess fail to counterbalance the loss of duty grosss they could prosecute in cut downing public disbursement which could hold negative impact on the economic system.

Trade recreation

Harmonizing to Abdalla ( 1997 ) , the EU policy for subsidies ( which significantly supports the agricultural and industrial sectors ) , could make an inequality refering entree to financess ( e.g. Spain is entitled to ten times the sum Morocco could have over the following five old ages ) is likely to prefer EU houses over their Mediterranean opposite numbers in competition and to pull foreign investings into the EU through the “ hubspoke ” consequence ( i.e. investings that could hold gone to one of the Mediterranean states would alternatively travel to the EU ( the hub ) and have entree from at that place to all the Mediterranean spouses ( the radiuss ) ) .

Impact on sustainability

The European Union ‘s Sustainability Impact Assessment ( SIA ) Study of the Euro-Mediterranean Free Trade Area has identified several societal impacts that can be inauspicious unless effectual extenuation action is taken ( SIAEMFTA, 2006 ) .

These possible societal impacts are:

a important rise in unemployment, peculiarly for liberalization of EU-MPC trade in industrial merchandises and agribusiness, and to a lesser extent for services and south-south liberalisation.

a autumn in pay rates associated with increased unemployment.

a important loss in authorities grosss, with attendant societal impacts through decreased outgo on wellness, instruction and societal support programmes.

greater exposure of hapless families to fluctuations in universe market monetary values for basic nutrients.

inauspicious effects on the position, life criterions and wellness of rural adult females, associated with accelerated transition from traditional to commercial agribusiness.

Furthermore, the same survey identified some inauspicious environmental impacts:

important local impacts on H2O resources, dirt birthrate and biodiversity in countries of high bing emphasis.

higher environmental emphasis in metropoliss, ensuing from worsening rural employment and accelerated rural-urban migration.

higher air pollution and coastal H2O pollution from greater international conveyance.

higher waste coevals from greater usage of packaging stuffs.

Challenges

Political stableness

The free trade country could merely thrive in there is political stableness. One of the biggest challenges is the declaration of the Israeli-Palestinian struggle. Previous efforts have failed so far.

Reforms

The MPC authorities demand to prosecute in reforms to carry through the demands of the free trade country and this poses a major challenge as to the accomplishment of these reforms.

Financial assistance

As described antecedently, some inauspicious societal impacts are likely to happen, particularly during the transitional period the free trade understanding. The Barcelona Process recognizes that the creative activity of a free-trade country and the success of the EMP require a significant addition in fiscal aid, which should promote sustainable autochthonal development and the mobilisation of local economic operators ( EU Website, 2010 ) .

The transatlantic competition for markets

In May 2003, the U.S. proposed the Middle East Free Trade Area Initiative ( MEFTA ) . MEFTA is an ambitious program of calibrated stairss to increase trade and investing with the US and to finally accomplish a individual free trade understanding ( FTA ) between the United States and the Middle Eastern states ( USTR Website, 2010 ) ,

The enterprise was launched by George W Bush in 2003. As with the old US-ASEAN FTA program, the thought is to construct the FTA spot by spot from the underside up. In peculiar, the United States will spread out and intensify economic ties through Trade and Investment Framework Agreements ( TIFAs ) , Bilateral Investment Treaties ( BITs ) , comprehensive Free Trade Agreements ( FTAs ) , and other steps as appropriate. Bilateral FTAs with Israel, Jordan, Morocco, Bahrain, and Oman have already entered into consequence.

Harmonizing to Bilaterals.org, MEFTA is clearly driven by Washington ‘s geopolitical and “ security ” involvements and non merely economic ends. In fact, harmonizing to some analysts, there is non much for the US to derive from MEFTA in simple trade footings. The existent docket is deriving more power in a part that is highly of import to the US in footings of oil, the Israeli-Arab struggle and Islamic combativeness. And that power includes intensifying US corporate control in the part, therefore the effectivity of an FTA.

The MEFTA undertaking butts straight against the EU ‘s programs for FTAs with the Mediterranean ( EMFTA ) and the Gulf provinces.

While the US ab initio set the deadline for MEFTA at 2013, functionaries now refer to a mark of 2014.

Decision