Uma Free Trade Agreement

The AMU Treaty calls for a strengthening of all forms of relations between Member States and a gradual transition to the free movement of goods, services and factors of production between Member States. Economic integration, it is hoped, would stimulate economic development and growth by allowing specialization in the image of comparative advantage, the exploitation of economies of scale through a broader market for goods and services, and a better negotiating position vis-à-vis third countries or trading blocs. The signing of similar treaties – in particular. B of the Maastricht and NAFTA agreements – was preceded by a long public debate involving a wide range of national institutions. This process is generally considered to be rewarding for the future union. More than 30 years ago, Haas (1960) found that there were important basic conditions for the success of economic integration, including the degree of homogeneity in the political ideologies of the Member States and the degree of democratic participation in the pre-treaty debate. The value of trade preferences for the Maghreb has declined slightly since 1986, particularly in the agricultural sector, with the main competitors of Greece, Portugal and Spain joining the COMMUNITY. 45/ The EU is also concerned about the growing economic disparities between the two regions in recent years. The EU recognises its vulnerability to the economic, social and demographic consequences of underdevelopment of its Mediterranean neighbours, which means that the EU is currently considering how to increase aid to the Maghreb. The aim is to establish a new form of long-term relationship that would anchor the region to the EU, perhaps on the nafta model.

The most important instrument will be the creation of an open economic space between the two regions, based on political dialogue and economic and financial cooperation. In the ongoing discussions, Maghreb countries are working to improve access to the European market for their exports and to increase European investment; they proposed the creation of a Euro-Maghrebin development bank, modelled on the European Bank for Reconstruction and Development (EBRD), and called for a reduction in external debt. 46/ Strengthening economic relations, including the development of trade within the AMU, has faced a number of political and economic difficulties. Libya`s food self-sufficiency policy has led to significant price distortions. As part of this policy, farmers were encouraged, including preferential prices for products such as energy, fertilizers and water supply; Farmers have also benefited from relatively low wages paid to a large population of migrant workers, particularly from Egypt and sub-Saharan Africa. 33/ The direct consequence of these support measures is that Libya, which may not have a comparative advantage in agriculture, is now able to produce a number of agricultural products (such as oranges, melons and vegetables) that can be sold at low retail prices and therefore often find their way to neighbouring Tunisia. On the Tunisian side, Libya`s policy towards migrant workers and their social system calls for harmonization of policies before free trade can be established. Authorities in a number of AMU countries stated that the relatively weak financial situation of many Maghreb companies made it difficult for them to provide competitive conditions for regional partners for trade finance.

This situation is particularly detrimental to European companies, which are not only stronger financially, but also benefit from increased public support for their exports. Maghreb companies say they are more affected than their European counterparts by Algerian policy of demanding stricter financing requirements from foreign suppliers. 24/ This situation has exacerbated the lack of competitiveness of amU companies vis-à-vis European companies, particularly in terms of quality, diversity and reliability of supply, which is the disadvantage that the removal of tariffs does not

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