EU-Tunisia relations

1. Background

EC-Tunisia cooperation goes back to July1969 when an agreement was signed for a period of five years, linking Tunisia to the EEC (which then included six members). These cooperation agreement was essentially commercial. Indeed, France was almost the only source of aid or other forms of cooperation, for it maintained considerable economic and political interests in the Maghreb. The same kind of agreements were signed with Algeria and Morocco as well.

Under this agreement, manufactured goods were exempt from duties, but were submitted to quotas reviewed according to the European economic situation. To exploit this advantage, Tunisia as well as Morocco invested massively in the textile and leather industries.

In the agricultural chapter, the EEC imposed substantive restrictions so as to prevent competitive goods from entering its market. Preferential tariffs were granted for certain agricultural products such as citrus fruits, exonerated from 80% (Spain wasn’t a member yet); or olive oil exonerated from 30% (as Italy couldn’t meet the Six’s market demand).

The terms of the agreement were only reciprocally applicable to the goods imported from the EEC which did not compete with the local production.

Under the Global Mediterranean Policy, new bilateral agreements were concluded in 1976 with all three Maghreb countries, Tunisia, Algeria and Morocco, -taking effect in 1978-. This time, the GMP went beyond the strict framework of commercial co-operation and provided for economic and financial aid (in the form of bilateral financial protocols, see table). The EEC intended this aid for the development, modernisation and diversification of their industrial and agricultural industries, while at the same time imposing new restrictions which proved to be catastrophic for North Africa’s exports:

  • The zero rate applied to industrial products imported from the eight Mediterranean countries with which the EEC was to co-operate under the GMP was no longer applicable to textiles and refined petroleum products.
  • In order to protect the Common Agricultural Policy, the EEC established a « tariff calendar » limiting the access at a preferential rate of agricultural products to the European market to seasons in which the European production cannot meet the demand. Introducing the tariff calendar had serious consequences for Tunisia and especially for Morocco, North Africa’s main agricultural exporter.

In 1981 and 1986, the cooperation agreements and financial protocols were renewed for a period of five years, with a net increase in the Commission grants and loans share of the protocols (the Commission’s loans are more advantageous than the European Investment Bank’s).

In 1991, the GMP was replaced by the Renovated Mediterranean Policy. The fourth generation of financial protocols were negotiated for the 1992-96 period. The main two innovations of the RMP consisted in prioritising economical and structural reforms in the Beneficiary countries and the accent on the regional cooperation and on environment.

2. Euro-Mediterranean Partnership

The MEDA Programme

The MEDA Programme is the main instrument to manage the aid under the Euro-Mediterranean Partnership, agreed in Barcelona in November 1995. The MEDA Programme was created to encourage and support the reform of economical and social structures of Mediterranean partners, in view of the establishment, by 2010 of a free trade area around the Mediterranean. The MEDA resources are attributed bilaterally, within the framework of the National Indicative Programmes while the regional Indicative Programme covers multilateral activities.

The Tunisian National Indicative Programme gives priority to the privatisation process, the rehabilitation of the financial sector and the reform of the Secondary and High education system. Tunisia received under MEDA I a total amount of €458 Million. Besides this amount, the European Investment Bank has granted up until now €620 Millions.

MEDA II will go on supporting the structural adjustment programmes and the development of the private sector, paying special attention to the female entrepreneurs. The development of civil society will accompany the process of structural reform aiming at a balanced social development.

Regional Cooperation

Besides the bilateral track, Tunisia participates as well within the framework of the regional co-operation conducted under MEDA. This second track of the Barcelona Process provides for a multilateral approach within the Euro-Mediterranean Partnership. Tunisia participates in the Euromed Heritage regional programme. From horizontal budget lines, Tunisia benefited from a total of €30 Million, for its participation in the MEDA Democracy, economic cooperation, environment, family planning, the fight against AIDS, NGO co-financing and food aid.

Association Agreement

Following the establishment of the Euro-Mediterranean Partnership in Barcelona in November 1995 the Association Agreement between the EU and Tunisia, concluded in July 1995, entering into force in March 1998. The association agreement with Tunisia was the first of the new generation of Euro-Mediterranean agreements. Replacing the 1976 cooperation agreement, the Association Agreement adds to the long standing economic cooperation new fields such as the political dialogue and cultural exchange, thus assembling the three chapters of the Barcelona Declaration.

Although every Euro-Mediterranean Association Agreement signed by the EU and its Mediterranean partners is agreed on bilateral basis, there are certain common aspects to all of them: political dialogue, respect for human rights and democracy, establishment of WTO-compatible free trade over a transitional period of up to 12 years, provisions relating to intellectual property, services, public procurement, competition rules, state aids and monopolies, economic cooperation in a wide range of sectors, cooperation relating to social affairs and migration (including re-admission of illegal immigrants and cultural cooperation.

The Agreements create two common institutions, the Association Council, at Ministerial level, and the Association Committee, at senior official level, which meet at regular basis(1).

Respect of human rights and democratic principles are an important element of political cooperation between the partners. The Agreements foresee the possibility to be suspended in the event of major human rights violations.

The main points of the EU-Tunisia Association Agreement economic chapter are the following:

  • Progressive establishment of a free-trade zone over a period of 12 years. Import taxes on EC products will diminish progressively in accordance with a calendar of listed products. Tunisia started already dismantling the tariffs in 1996, even before the agreement entered into force by 1998. Exceptional measures, limited to a maximum of 5 years, will allow the partner country to re-introduce or raise custom-duties to protect infant industries. This derogation will no longer be possible at the end of the 12-year transition period.
  • Free circulation of capitals will be instituted for direct investments in Tunisia as well as the possibility to repatriate incomes from the capital and all profits.
  • The tariff calendar and quota systems were firstly maintained for the agricultural and fisheries sectors, but they were reviewed in 2001. Mutual concessions were agreed for agricultural products, like the increasing preferential quota for Tunisian olive oil.

3. Trade Relations

Tunisian economy is strongly linked to the European Union. European member countries absorb 78% of Tunisian exports (€ 4.762 Million in 1999) and provide for 72% of its imports (€ 6.009 Million in 1999). Tunisia mainly imports from the European Union member states textiles and clothing, machinery, transport material and chemical products. The country’s exports are mainly textiles and clothing, machinery and agricultural products.

(1) Monthly calendar available at: EU’s Mediterranean Policy site