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WHAT IS THE MEDITERRANEAN FREE TRADE ZONE (MFTZ)? Intro The goal of establishing a Mediterranean Free Trade Zone (MFTZ) - to encompass 12 non-EU nations of the Mediterranean region as well as the entire European Union - is both the result of, and the primary force driving an inter-governmental forum called the Euro-Mediterranean Partnership. This Euro-Med Partnership, as it is widely known, works towards increasing economic and social integration among the EU and the non-EU nations of the Mediterranean region. History of the Euro-Med Partnership In November 1995, Foreign Ministers representing 27 European and Mediterranean governments met in Barcelona to discuss possible economic, social and political collaboration. The outcome of this conference was the Barcelona Declaration officially establishing a comprehensive policy package called the European Mediterranean Partnership. The partnership is a joint initiative by governments on both sides of the Mediterranean Sea including all 15 member states of the European Union, plus Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, the Palestinian Authority, Syria, Tunisia, and Turkey. Goals Officially, the Barcelona Declaration articulates three main goals for the partnership: 1.A definition of a common area of peace and stability through a reinforcement of political dialogue and security; 2.A rapprochement between peoples through a social, cultural and human partnership; 3.A construction of a zone of "shared prosperity" and the gradual establishment of a free trade zone throughout the region, to be fully functional by the year 2010. Rationale / Motivation The European Union is the driving force and the major funder behind the Euro-Med process. The goal of the ultimate establishment of a MFTZ, by far the most ambitious objective of the partnership, was the single most important factor behind the Euro-Med Partnership's formation. If established, the MFTZ would become the world's most populous regional trade zone. Initial efforts to encourage regional integration between the EU and the Mediterranean countries stem from the EU's desire to strengthen its sphere of influence among its southern and eastern neighbors. This is to be acheived by ensuring opportunities for establishing profitable EU interests in Mediterranean markets. While currently Mediteranean countries make up a relatively small percentage of the EU's international trade, the Mediterranean markets' proximity to Europe and the sheer number of people living in the region make an MFTZ an attractive idea. Moreover, by capitalizing on the region's economic potential the EU also hopes that economic development will also contribute to social stability in its neighbors, many of which have tumultuous social and political systems. The goal of developing political dialogue in the region is largely seen as a prerequisite for ensuring a stable market. The development of social and cultural ties, also mentioned as one of the three pillars of the Euro-Med Partnership, can be seen as a means of gaining support for the overall regional integration process from civil society bodies. The motiviation for Mediterranean nations to join the Partnership is quite different. The EU is the largest trading partner for most of the Mediterranean nations, however, most Mediterranean partners already benefit from preferential access to EU markets for manufactured goods under the EU's General System of Preferences. Trade in agriculture and textiles, two of the most significant economic sectors for Mediterranean countries, are left out of the trade liberalization agreements in order to protect uncompetitive industries operating within the EU. Thus, it may justifiably be asked, what the Mediterranean countries have to gain from such a trade zone? The primary motivation for the non-European Mediterranean states to enter into a free trade agreement with the EU seems to be the hope of gaining foreign investment from the EU member states, and with it an associated increase in jobs, infrastructure, and access to technology. The various aid packages and other economic benefits such as special terms for accessing finance are also major factors in convincing the Mediterranean countries to open their markets. Bilateral and Regional Integration While 2010 is the target date for the establishment of the region-wide free trade zone, the EU has already drafted bilateral trade agreements with Tunisia, Israel, Morocco, and Jordan, and an interim agreement has been concluded between the EU and the PLO on behalf of the Palestinian Authority. Trade relations between the EU and Turkey, Cyprus and Malta are governed by pre-existing Association Agreements. Negotiations are still underway with Egypt, Lebanon, Algeria, and Syria. The conditions establishedf in these bilateral agreements will serve as precedents in the eventual formation of the MFTZ, should the process actually go that far. Already the Euro-Med process has set up regular ministerial meetings, working groups, and other cooperation and/or consultation mechanisms among members covering such areas as transporation, energy, private sector investment, agriculture, and the environment. The levels of enthusiasm, and thus, the budgets for the different fields varies widely. Roughly 90% of the Euro-Med budget is dedicated to the advancement of the bilateral agreements, while only 10% goes towards regional activities. Environmental issues, treated primarily under the regional integration budget line, receive only a small percentage of this already limited funding. |
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