TRADE-MEDITERRANEAN: Development of South Would Benefit Europe

By Tito Drago Reprint | | Print |

Tito Drago

MADRID, Mar 20 2002 (IPS) - The European Union’s support mechanisms for trade and development of the southern Mediterranean countries, agreed this week, will benefit both sides said Spain’s Secretary of Trade, Juan Costa, Wednesday.

The Economy and Trade ministers of the 15 European Union (EU) countries met Tuesday in Toledo, 70 km outside Madrid, with their counterparts from Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Libya, Malta, Morocco, Palestine, Tunisia and Turkey.

The implementation of the accords reached in Toledo will not only boost trade between the two regions, but will also attract foreign investment, and will drive greater economic and social development, Costa told IPS. “The benefit will be mutual,” he said.

Deliberations in the historic Spanish town produced a commitment to create an integrated economic space in the Mediterranean by 2010 and would include the 27 countries represented at the trade meeting.

Sitting at the same table, debating trade issues, were ministers Maher Masri, of Palestine, and Amir Hayek, of Israel, engaged in dialogue despite the escalation of violence between their nations.

Hayek said the talks were cordial, noting that the meeting was not a venue to discuss politics, but rather “a place where each one came to defend his trade interests.”

The Israeli minister expressed his firm conviction that “progress and economic development are key for finding peace… If your people are doing well, if they have work, violence passes to the background and is then forgotten.”

The chairman of the meeting, Spain’s Economy Minister Rodrigo Rato, expressed a similar sentiment: “There are moments in which concrete trade discussions can serve to create a basis for understanding.”

At the meeting, the ministers representing the southern Mediterranean countries agreed to be incorporated into the pan- European system known as “accumulation of origin” – an offshoot of rules of product origin in international trade -, offered by the EU.

Currently, products manufactured in the southern Mediterranean must contain at least 60 percent national inputs to enter the EU tariff free, as established by the trade agreements in effect between the European bloc, or its members, with some of the 12 southern countries.

Under the accumulation rules, if more than one of the 12 southern Mediterranean countries contributes to manufacturing a certain product, the percentage of national inputs would be considered as coming from one country, thus facilitating entry into the EU market.

For example, a handbag made in Morocco would figure in the pieces produced in that country, plus the leather imported from Algeria and the hardware imported from Tunisia, which the EU would then import free of tariffs.

The EU has trade association agreements in force with Cyprus, Israel, Malta Morocco, Tunisia and Turkey, and another with Jordan will take effect in three weeks. An accord with the Palestinian National Authority exists on an interim basis.

Treaties signed with Algeria, Egypt and Lebanon are pending ratification, though could be finalised before the next meeting of the Mediterranean Basin Foreign Ministers, slated for April in Valencia, Spain.

Both sides also agreed in Toledo to set up a committee with government and private sector representatives to draft trade standardisation rules.

Spain’s minister Costa said trade would benefit from the creation of a special line of credit at the European Investment Bank for the countries of the southern Mediterranean and the doubling of development funds earmarked for the region, as decided at the European Summit over the weekend in the Spanish city of Barcelona.

Egyptian minister Youssef Boutros Ghali, speaking on behalf of the 12 southern countries, applauded the new credit line. However, several ministers from that region stated that the creation of a Euro-Mediterranean Bank would be a better option.

Spain had presented such a proposal, but did not win consensus at the Barcelona Summit, though could make another attempt at the next European meeting of heads of state in June in Sevilla.

At the close of the Toledo conference, the president of the Spanish autonomous community of Castilla-La Mancha, José Bono, urged the EU “to carry the flag of a more just new world order,” one that does not condemn the countries of the developing South to continue in poverty.