EU and Maghreb Countries: bilateral agreements

Bilateral agreements were first signed in July 1969 for a period of five years, linking Morocco, Algeria and Tunisia to the EEC (which then included six members). These cooperation agreements were 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.

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, Morocco and Tunisia 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 agreements 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 Maghrebi countries (taking effect in 1978). This time, the G.M.P. 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products imported from the eight Mediterranean countries with which the EEC was to co-operate under the G.M.P. was no longer applicable to textiles and refined petroleum products (a large part of Algerian exports).

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 G.M.P. was replaced by the Renovated Mediterranean Policy. The fourth generation of financial protocols was negotiated for the 1992-96 period, but the European Parliament refused to approve Morocco’s protocol until October 1992, in protest of Morocco’s bad human rights record at home and in the Western Sahara.

EC aid to the Maghreb countries under the 1978-96 financial protocols (in millions of Ecus) :

Morocco:

EEC budgetary funds EIB loans Total
1978-1981 56 74 130
1982-1986 90 109 199
1987-1991 151 173 324
1992-1996 218 220 438

Algeria:

EEC budgetary funds EIB loans Total
1978-1981 70 44 114
1982-1986 107 44 151
1987-1991 183 56 239
1992-1996 70 280 350

Tunisia:

EEC budgetary funds EIB loans Total
1978-1981 41 54 95
1982-1986 78 61 139
1987-1991 131 93 224
1992-1996 116 168 284

Euro-Mediterranean Partnership and Association Agreements

Since the Barcelona Conference, held from 26 to 28 November 1995, the Community has described the Euro-Mediterranean cooperation as a « partnership » and hopes to see a vast free market Euro-Mediterranean take shape around 2010. The EU-Tunisia Association Agreement, concluded in June 1995, entered into force in March 1998, but Tunisia had previously anticipated the first phase of three years by dismantling 28% of its tariffs and taxes on imports of the EC. The EU-Morocco Agreement, signed in November 1995, took effect in 2000. After a decade of waiting, a new EU-Algeria Association Agreement was initiated in September 2005, three years after its signing in 2002 at the Valencia Summit. The three association agreements are country-specific, but possess nevertheless common structure, formed of three parts: an economic, a political and a social component.

These agreements are characterised as follows:

  • The texts call for the respect for human rights, economic freedom and democratic principles, in agreement with the United Nations Charter; a need for cooperation through political, economic and social dialogue, economic and social in the interest all parties concerned; the establishment of political, economic and social reforms for the stability and the proper development of the region.
  • In return, the agreements will promote the gradual establishment of a free-market area for a maximum period of 12 years commencing at the time of entry into force of agreements.
  • Taxes on imports of products from the EC will decrease gradually according to a schedule of listed products. Exceptional measures, limited to a maximum of five years, will enable the partner countries to reintroduce or raise tariffs to protect infant industries. This exemption will no longer be accepted at the end of 12 years of the transition period.
  • Free movement of capital will be established for direct investment in non-members as well as the ability to repatriate investment income and profits.
  • A directory of tariffs and quota systems were initially kept in the agriculture and fisheries sectors, but declined reciprocally and gradually in the hope of reaching a full free trade area by 2012. (The import quotas for the following products remain in force: cut flowers, tomatoes, oranges, potatoes and sardines from Morocco, olive oil from Tunisia).
  • The question of migration and other social issues are a significant part of association agreements; the integration of immigrant communities, respect for cultural identity, and the fight against illegal immigration are addressed by these agreements.
  • Since the end of the protocols of the fourth generation, financial support to countries of the Maghreb is determined by bilateral agreements. The Community has instituted a new system of financial assistance allocation in the form of an envelope of ECU 4.685 billion at its disposal for the period 1996-99 to be gradually distributed according to the needs, management and integration capacity of each Mediterranean partner countries (Morocco, Tunisia, Algeria, Egypt, Jordan, Lebanon, Palestinian Authority, Syria and Israel).
  • A Financial programme entitled MEDA was put into place in 1996 (modified and renamed in 2000 as the MEDA II) in order to support economic and social reforms carried out in partner countries. 5.35 billion Euros was at the disposal of partner states for the 2000-2006 ; the programme was replaced in 2007 by the European Neighbourhood and Partnership Instrument (ENPI), with a new budget of 12billion Euros for Europe’s neighbourhood.

The Action Plans and the European Neighborhood Policy

Bilateral relations between the EU and the Maghreb countries have been marked by the establishment of the Barcelona Process, and were strengthened with the entry into force in 2005 of a new initiative, the European Neighborhood Policy, seeking to consolidate stability and relations with the Southern and Eastern neighborhoods of the EU. Morocco and Tunisia have shown great interest in this new Euro-Mediterranean initiative. It is worth noting that the neighborhood policy initiated with Morocco has recently given rise to an advanced status in its relations with the EU. Nevertheless, the European Commission stressed Algeria’s “reserved” attitude vis-à-vis the European Neighborhood Policy, which it has declined to join.

The ENP involves a set of bilateral Action Plans (EU-Morocco and EU-Tunisia), adopted in July 2008, outlining a set of goals and priorities common to the EU and its neighborhood. The Action Plans aim to promote regional security and stability through the consolidation of bilateral political, economic, social and cultural cooperation between the EU and neighboring countries.

The EU hopes, in effect, to promote stability and regional security, while avoiding the emergence of divisions between the EU and its neighborhood. Moreover, this initiative aims to bring the countries neighboring the EU, whose relations with the EU are a priority of foreign policy, in line with the common objectives which can be found in the Strategy Paper of the ENP.

The main opportunities for cooperation offered by the ENP can be defined as follows:

  • Achieving a significant level of integration of bilateral relations between the EU and the Maghreb partners, through the deepening of political contributions, and their access to advanced European internal market;
  • Strengthening political dialogue initially advanced by the Barcelona Process;
  • Deepening North-South economic integration by the gradual reduction of trade barriers. Promoting also economic relations between South-South neighbors at the regional level;
  • The provision of EU financial support for any reform project and action in line with the agreement of association, and acknowledged in the Action Plan of the country in question – The EIB has provided financial support through the FEMIP (Facility for Euro-Mediterranean Investment and Partnership) with 8.7 billion Euros provided for the period 2007-2013, having already contributed 7.3 billion Euros between 2002 and 2007. The implementation of the ENPI has also contributed to the support for Mediterranean countries with a global budget of 12 billion Euros for the 2007-2013 period;
  • A targeted assistance in order to prepare for legislative rapprochement between the EU and the countries concerned;