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Peter Mandelson EU Trade CommissionerAgadir and after: prospects for a Free Trade Area of the Mediterranean First Agadir Investment ForumBrussels, 8 April 2008

Pierre Perrin-Monlouis Dernière mise à jour: 20 octobre 2021

First Agadir Investment Forum
Brussels, 8 April 2008

The EuroMed Vision

Every effective political relationship has to be driven by a vision: a sense of where you want to go and why it matters. For Europe and the countries of the Southern Mediterranean that vision has always been very strong. We call it the ‘Barcelona process’, but it is more than just a process. It is a shared history and geography, a shared sense that we are united by our common interests in a changing and globalising world.

President Sarkozy is just the latest in a long line of European leaders who have looked to the Mediterranean with a sense of excitement and hope. There are many different expressions of that, but the idea of a free trade area of the Mediterranean by 2010 has always captured my imagination, just as it has captured the imagination of others.

In the last decade we’ve made it more than an idea. We have Association Agreements in place that have opened EU markets to your goods. These agreements have made a real difference. They have doubled your trade with the EU over the last decade and cut your trade deficit with the EU by half. They have helped Southern Mediterranean countries create jobs and attract investment. We are slowly pushing forward with liberalising services and making it easier to set up businesses in both directions.

Yet I often sense disappointment from countries of the Southern Mediterranean that the EuroMed process is not producing the gains they expected – or at least not fast enough. This is especially true in terms of foreign direct investment. The conditions look superficially good: being on the EU’s doorstep, and having preferential trading conditions with the EU are huge competitive advantages.

But despite their closeness to Europe and their promising growth, the countries of the Southern Mediterranean have attracted only 1% of EU foreign investment since 2000. Investors will go where conditions for business are favourable, where there is certainty for their investments and where there is a market for their goods. They might see potential in the region, just as I do. But we have not yet convinced them in great enough numbers to put their money where their aspirations are. Today is about how we change that.

Building on Agadir to attract investment

Above all, it is about how we can build on the Agadir agreement to encourage greater investment and boost greater regional integration.

I have always been a strong supporter of the Agadir Agreement, and I was pleased when it finally entered into force last year. I think it has the potential to drive regional integration by creating a cross-border market of its own and showing it can work. I think it will be a new incentive for investors in the region.

Why? Because Agadir offers a market of 120 million consumers. Not only do each of the countries enjoy preferential access to the EU market, but goods that are produced jointly between them can also access on preferential terms thanks to our system of cumulation of origin. Parts of a product originating in any one of the Agadir countries can be added to parts originating not only in that country but in any of the other Agadir countries, finished and exported to the EU at a reduced tariff.

The Agadir countries have created a single factory floor which gives them access to new supply chains and new economies of scale. Whether you are talking about a shirt, or a car, that is good news. And because the same terms apply to all 42 countries that are part of the EU’s revised rules of origin for the Mediterranean this can mean sourcing goods from the whole region, including finishing goods part-produced in the EU.

Creating the right investment climate

But the lesson of the last decade is that while these kinds of comparative advantages matter, they are only part of the picture. Part of the goal of today is to give business an opportunity to reinforce what it is looking for in these markets. I have no doubt they will say that attracting investment means a level of legal security and predictability and non-discrimination great enough to make large-scale capital investment a viable option.

Here internal reforms in the Agadir countries are in progress, and I can only encourage your governments to accelerate and firmly embed them. I welcome the proactive approach of the Agadir Technical Unit, under the leadership of Mr. Tounsi, in tackling these issues. The EU’s financial and technical support for the Technical Unit is important, but the political ownership has to belong to the Agadir member States. I am very pleased to see that such a sense of ownership is growing.

Investors also want to see a properly integrated market. This is not only about an absence of tariffs at the borders but being sure that they will not face non-tariff barriers as they move goods within that market. The basic point is that you need to match the outward openness of your markets to each other by a common regulatory platform.

I think there is some way to go on this, in particular on standards and trade facilitation. Your membership of the WTO and participation in its work on non-tariff barriers should help you here. As should the objective of concluding agreements on industrial product standards with the EU. I’m not underestimating the challenge of this. It’s a process that the EU went through in building its single market and it can be complex and difficult work – that’s why the Commission has offered help and experience as you need it. But only when it is done will we really be able to talk about a single Agadir market.

Regional integration

Mentioning regional integration brings me back to the bigger vision question: the idea of a free trade area of the Mediterranean. At the core of this idea are two important, even fundamental, changes to the way trade works around the Mediterranean. The first is open and free trade between the EU and the individual countries of the Southern rim. There, we have made good progress.

The other part of a EuroMed free trade area is about creating a regional market place along the southern shore of the Mediterranean, to echo the single market that we have on the northern side. This has turned out to be – as we expected it would be – a political challenge of the first order. You don’t need me to tell you how far you are away from the second of those goals.

Probably the single most defining fact I have ever read about this region is that regional integration in the Southern Mediterranean is lower than anywhere else in the world. At the root of our problems attracting investment, and in really tapping the productive potential of the region is that fact. You do not trade with your neighbours. It makes you almost unique in the world. The region’s economic future depends on changing that. Agadir is a step in the right direction.

On that point I want to mention one specific regional issue. Palestinian trade. The trade figures we are talking about are – unfortunately – tiny. But those goods that make it out of the territories are destined either for Israel or for the EU. If and when the political situation allows it, we should be able to offer new regional trading opportunities to the Palestinians and expand the markets for Palestinian goods. This could be through Agadir – or through other agreements – but our objective must be to integrate the Palestinian economy into the regional economy. Stability for the territories will only be built on opportunity.


I started by saying that all effective political partnerships need to be based on a vision. But of course politics is also about driving change in the here and now. The Agadir Agreement shows that the there are plenty in the Southern Mediterranean region who are serious about reform and change. That the region does want not just a new generation of political and economic ties with the EU, but also among the neighbours of the Southern Mediteranean. The EU is deeply committed to that vision. We will be your constant partner in making it a reality.

Today the Southern Mediterranean region is confident enough to signal to businesses that Agadir means business, and I can only welcome that. I hope that business will hear that message.

Pierre Perrin-Monlouis
Pierre Perrin-Monlouis
Fondateur de Rente et Patrimoine (cabinet de gestion de patrimoine), Pierre Perrin-Monlouis est un analyste et trader pour compte propre. Il vous fait profiter de son expérience en trading grâce à ses analyses financières et décrypte pour vous les actualités des marchés. Son approche globale des marchés combine à la fois l'analyse technique et l'analyse fondamentale sur l'ensemble des marchés : crypto, forex, actions et matières premières.