Commission pushing to get Euro-Med programme back on track to boost trade

Date: 09/11/00

By Simon Coss

FOREIGN ministers from the EU, North Africa and the Middle East will have their work cut out to breathe new life into the faltering five-year-old Euro-Med process when they meet in Marseille next week.

Nearly everyone agrees that up until now the 'Barcelona process' - named after the 1995 ministerial meeting in the Spanish city which launched the programme - has been a disappointment.

In a report on Union-Mediterranean ties published in September, the European Commission admitted that "progress in the partnership has been slower than hoped due to a number of political and economic factors".

External Relations Commis-sioner Chris Patten acknowledged then that many observers felt that the "achievements of the Barcelona process are lagging behind the huge potential of the Euro-Mediterranean partnership".

The Commission set out a number of measures it believes could reinvigorate the flagging process and which it hopes foreign ministers will take on board in Marseille. The underlying aim of the proposed measures is very ambitious: the Commission wants to see a free- trade area set up in the Mediterranean region by 2010.

Trade with the EU, in products ranging from oil to orange juice, is relatively healthy. Around half of exports from the region go to Union countries and half of its imports come from the EU. But trading links between the 12 states which signed the Euro-Med agreement in 1995 - Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, the Palestinian Authority, Lebanon, Syria, Turkey, Cyprus and Malta - are paltry at around 5% of total trade flows.

Critics of the Euro-Med approach argue that these poor trading links may be a direct result of the persistent political unrest. While the current crisis in Israel is perhaps the most graphic example of this instability, they point out that political relations between Arab states in the area are often extremely tense as well. Those same critics add that until the underlying tensions in North Africa and the Middle East are resolved, attempts to foster economic cooperation will never amount to much.

But the Commission disagrees. It insists that it is possible to take a two-track approach and treat economic and political questions separately. "Whether a country decides to open up its economy to trade and investment with the EU is, in a way, nothing to do with the outcome of the peace process," said one Union official recently, referring to the latest Arab-Israeli crisis.

Patten also argues that it is in the EU's interest to ensure that prosperity spreads to its southern neighbours as quickly as possible. "The EU wishes to have the closest relations possible with our Mediterranean partners," he said recently.

In a bid to get the Barcelona process back on track,the Commission's September Communication suggests a number of incentives for Mediterranean countries. These include promising countries which sign association agree-ments that their national industries will not be exposed to the full impact of the EU's free market immediately.

Officials say concerns over the social impact of signing these accords are a key factor which explains why most countries in the region have yet to conclude such deals."That is one reason why Egypt has not signed and why Syria, Lebanon and Algeria have not finished negotiations," said one official.

But the Commission is not only calling for carrots to be offered to Euro-Med states. It also wants future aid to the region - currently worth around €1 billion a year - to come with more strings attached.

The EU executive says that in future Euro-Med funding should be targeted towards encouraging countries to sign association agreements. It also argues that funding should depend at least in part on the efforts made by governments to improve their human rights records.