Chance or Necessity

A sustainable development of Europe depends, to a large extent, on that of its immediate neighbours. Indeed, a widening of the gap between an industrialised and affluent Europe, on the one hand, and vulnerable and marginalised developing neighbouring countries, on the other hand, would have direct adverse impacts on the political and social stability of Europe. It is for this reason that Europe has been involved in the construction and reinforcement of a Euro - Mediterranean space, despite an economy that is in process of recovery, particularly in the wake of the situation marked by overproduction and unemployment which it experienced during the 1990s.

Among the future challenges which Europe will have to take up there figures the challenge relating to the economic integration of the countries of the South - Mediterranean region which will be the developers of an extended, unified and prosperous Europe.

The cultural and historical bonds between Europe and the other Mediterranean countries constitute a sound basis for the construction of a shared economic space, serving the interests of the whole region and complying with common regulations. The pollution of the Mediterranean basin, for instance, does clearly attest to the urgency to narrow the gap between the North and the South in matter of regulations, prevention techniques and means of action in case of accident.

It is unthinkable today to consider that frontiers constitute a protection against outside aggression. With the new technological developments and the new communication systems, the notion of territory has given way to the principle of inter-dependence.

Observing the same directives of protection of man and preservation of the environment, applying the same international trade rules and producing according to the same international standards: such are the pillars on which the edifice of the future Euro - Mediterranean trade zone stands.

Today, a large majority of Mediterranean countries have either adhered to Europe or ensured their anchorage to it by association agreements, established according to a specific schedule for each individual country and taking into consideration the level of development of each. The first countries to have made a bet on European integration and to have signed agreements are Turkey and Tunisia, respectively. Being a necessary partner for a large number of Southern Mediterranean countries, integrating Europe is, therefore, a most natural thing.

In addition, the forming of large regional economic sets (NAFTA, for North America, as well as an informal regional zone in South East Asia) together with the globalisation of international trade can only urge the strengthening of ties between countries belonging to the same geo-political space.

Impact on European enterprises

For a few years now, certain Southern Mediterranean countries have constituted an outpost for European enterprises which had begun to extend their production space in order to manufacture, at a lesser cost, products that may be re-exported to Europe. The major assets sought being a skilled and cheap labourforce, as well as geographical closeness.

Since investing in a developing country contributes in boosting one's economy, the outcome will, in due time, affect employment positively. This, in turn, swells the ranks of consumers. Accordingly, it has been noted that the fast developing Southern Mediterranean countries gradually become consumption countries and, consequently, strategic targets for exportation development. Such is the case today of the automobile industry of Turkey, Egypt and Morocco, for instance.

A presence across the Mediterranean equally presents the advantage of developing an exportation culture, thus making it possible to extend to new markets further south by manufacturing products intended to meet local needs. Certain partnerships or technology transfer projects thus make it possible to activate a given market and to take up position again during the profitability phase with regard to products and/ or markets that are declining in Europe.

In addition, the crucial problem which Europe will soon be faced with, i. e. that of a shortage of human resources to maintain its growth and production levels, could be avoided if an effective association were to take place between the North and the South. The Southern Mediterranean remains an immense potential that has hardly been exploited, including not only human resources and manpower, but also grey matter, as well as an investment space (acquisition of firms, set up of new firms …). Moreover, the opportunities of distance work offered by the new technologies may constitute a further incentive to envisage a relocation to the South.

All the above advantages cannot be long lasting unless there are clear regulations in matter of investment incentives and investment protection, modernisation of infrastructures, information and telecommunication technologies, as well as free flow of capital.

Impact on Southern Mediterranean enterprises

The major risk likely to be faced by the enterprises of the Southern Mediterranean region, on the whole, would be lack of competitiveness. But, as they say, the game is worth the candle. Indeed, for those firms who can prepare themselves properly for it, there will be the prospect of accessing a market of over 300 million inhabitants. Of course, the competition will be fierce, including in the traditionally "private preserves". However, the strength of the enterprises of the Southern Mediterranean region will rest, for the major part, on their acquaintance with the local culture and the practices prevailing in their markets.

The upgrading programmes provided as a prelude to the implementation of free exchange, and financed for the major part by Europe, are further assets in the hands of those enterprises of the South wishing to prepare for the change and to improve their productivity and industrial performance.

These upgrading programmes require, of course, setting out a legislative framework regulating industrial co-operation, the harmonising of legislations, co-operation in customs related matters, as well as financial co-operation. For this reason, the free exchange agreement only involves those countries that have started a liberalisation and structural adjustment programme, geared to establishing market related mechanisms and freedom of foreign trade, as well as activating the process of privatisation of public enterprises.

The stakes attendant upon free exchange with Europe rest, for the enterprises of the South, in the potential technological or financial partnerships, in ensuring return on investment, as well as in activating their markets by competition.

It is worth noting, on the other hand, that South/ South exchanges have already been marked by a new dynamics and are rapidly developing in a free exchange zone as the rules of globalisation apply between all partner countries.

The Euro - Mediterranean free trade zone emerges, in fine, as a vital need and an inescapable necessity for the entire countries in this Euro - Mediterranean space.