Econostrum | Economic News in the Mediterranean

Mediterranean economy seeks second wind

Written by Nathalie Bureau du Colombier on Wednesday, October 24th 2012 à 17:31 | Read 496 times

The euro-mediterranean partnership is not a priority for Europe's political decision makers. There is room for improvement in trade relations with Middle Eastern and Maghreb countries. Europe and the Mediterranean Economy, edited by the Euro-Mediterranean Forum of Institutes of Economic Sciences (FEMISE), examines the situation 17 years on from the Barcelona Process.

Europe and the Mediterranean Economy, Joan Costa-Font, published by Routledge, "FEMISE Edited Volumes" series
Europe and the Mediterranean Economy, Joan Costa-Font, published by Routledge, "FEMISE Edited Volumes" series
For the last decade or so, trade in Mediterranean countries has benefited from the euro-mediterranean partnership and association agreements. This trend was undoubtedly triggered by the 2003 Agadir Agreement, which encouraged new trade links. On top of the established links with Europe, the Middle Eastern and Maghreb countries began trading with the US and Asia.

However, in spite of these new trade links, the establishment of a free-trade zone in the region and the removal of customs barriers, there are still some obstacles to trade growth.

In Europe and the Mediterranean Economy, Joan Costa-Font - lecturer in political economy at the London School of Economics and Political Science (UK) and member of FEMISE - discusses the need to continue efforts to liberalise trade by abolishing the large numbers of non-tariff barriers that still remain.
These include health regulations in the agricultural sector and technical restrictions in textiles and clothing. Harmonising and standardising procedures and products will contribute to a boost in exports.

Technological developments improve productivity

Tanger Free Zone in Marocco. (Photo TFZ)
Tanger Free Zone in Marocco. (Photo TFZ)
Improving transport and logistics would increase trade by 30% in Morocco, 45% in Algeria and 25% in Tunisia, according to the work edited by FEMISE and published by Routledge as part of the "FEMISE Edited Volumes" series.
Political stability in the Middle Eastern and Maghreb countries also affects trade. Since the events of the Arab Spring, the economic situation has remained extremely fragile on account of low tourist numbers and capital flows drying up. Foreign direct investment has simply collapsed. Moreover, despite not being hugely affected by the global economic crisis, Mediterranean countries have nonetheless suffered the backlash as weak demand from Europe has caused trade to dry up. 
The authors ask whether the privatisation process of the 1990s came at the right time.
"Was the Maghreb region mature?" They note that southern Mediterranean countries capitalised on technological developments to improve productivity. Israel, for example, saw a sharp rise in high-tech exports. However, workers' salaries remain stagnant in spite of the liberalisation of trade, and this is encouraging them to emigrate.
Europe and the Mediterranean Economy, Joan Costa-Font, published by Routledge, "FEMISE Edited Volumes" series.

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