欧洲地中海研究委员会-后疫情时代欧盟南部邻里贸易关系（英文）-2021.5-96页_8mb

Summary of "Post-COVID-19 EU-Southern Neighbourhood Trade Relations"

Core Content

This document provides an in-depth analysis of the impact of the COVID-19 pandemic on trade relations between the European Union (EU) and the Southern Neighbourhood (SN) countries, which include Morocco, Algeria, Tunisia, Egypt, Israel, Palestine, Jordan, and Lebanon. It also explores potential scenarios for modernising these trade relations in the post-pandemic era, focusing on the evolution of Free Trade Areas (FTAs) and the broader implications for economic integration and regional stability.

Main Points

1. Trade Relationships Overview

• The EU is a major trade partner for the SN countries, particularly in goods and services.
• Trade is governed by the Euro-Mediterranean Association Agreements (EMAAs), which were mostly implemented between 2000 and 2005.
• The EU is the number one merchandise trade partner for all SN countries except Jordan and Palestine, where Saudi Arabia holds that position.
• The trade relationship is highly asymmetric, with the EMAA region accounting for only 4% of the EU’s external trade.

2. Impact of the Pandemic on Trade

• The pandemic caused a significant decline in global trade, with a 5.6% drop in goods and 15.4% in services in 2020.
• Agri-food trade showed mixed results: EU agri-food exports increased by 0.5%, with Morocco and Algeria experiencing strong growth in exports, while Lebanon saw a sharp decline (-37.9%).
• Trade in services declined more severely, especially in the tourism sector, which was heavily impacted due to lockdowns and travel restrictions.
• In 2019, tourism accounted for 6–20% of formal employment in the SN, and its collapse had a direct effect on employment and income.

3. Impact on Food Security

• The pandemic disrupted both the supply and demand for food, affecting food security in the SN region.
• Countries with high reliance on imports for staple goods were particularly vulnerable.
• Refugees and poorer households, who spend a larger portion of their budget on food, were more likely to adopt emergency coping strategies, such as reducing calorie intake.

4. Post-Pandemic Trade Strategies and Recommendations

• The EU's post-pandemic recovery plans, such as the "Next Generation EU" initiative, suggest opportunities for modernising trade relations with the SN.
• Re-shoring and near-shoring trends in EU and global value chains (GVCs) could benefit the SN by bringing production closer to the EU.
• The Deep and Comprehensive Free Trade Areas (DCFTAs) with Tunisia and Morocco are currently under negotiation, but a more gradual, sectoral approach may be more realistic in the short-to-medium term.
• The modernisation of the Pan-Euro-Mediterranean Convention (PEM Convention) should be prioritised to enhance regional value chain (RVC) integration.
• The EU should integrate its trade modernisation efforts with broader EU-Africa trade relations, with the long-term goal of establishing a "continent-to-continent Free Trade Area."

Key Findings

• Agri-food exports from the SN saw significant growth in some countries, but not all.
• Tourism and transport are critical sectors in the SN, but they were among the most affected by the pandemic.
• The asymmetric nature of EU-SN trade relations means that the benefits of trade liberalisation are not evenly distributed.
• Legal and political issues, such as the status of Western Sahara, have hindered the full implementation of trade agreements with Morocco.
• The PEM Convention is a key legal instrument for promoting regional trade integration, but its modernisation is still pending due to political reservations.

Recommendations

• The EU and SN countries should focus on sectoral agreements rather than immediate DCFTA implementation.
• The modernisation of the PEM Convention is crucial for enhancing regional economic integration and value chain cooperation.
• Strengthening institutional quality, improving telecommunications, and promoting digital transformation should be central to developing high-productivity service sectors.
• The EU should align its trade modernisation efforts with its broader strategy for EU-Africa relations, aiming for long-term economic integration and stability.

Conclusion

The pandemic has had a profound impact on trade relations between the EU and the SN, particularly in the areas of agri-food and services. While the EU remains a key trade partner, the asymmetry of these relations and the challenges posed by the pandemic highlight the need for more inclusive, modernised, and sustainable trade frameworks. The post-pandemic period presents an opportunity for the EU and the SN to deepen economic integration and promote regional cooperation, especially through the modernisation of trade agreements and the development of resilient supply chains.

Key Authors and Contributors

• Katarzyna W. Sidlo: Coordinator of the study, Director of the MENA Department at CASE.
• Guillaume Van der Loo: Research Fellow at EGMONT and EPC, and contributed to the analysis of Free Trade Areas.
• Esmat Mostafa Kamel: Focused on trade in services.
• Hussein Suleiman: Analyzed the impact of trade disruptions on food security.

References

• ECORYS, CASE, & FEMISE (2020). Ex-post evaluation of the impact of trade chapters of the Euro-Mediterranean Association Agreements.
• UNCTAD (2020). "COVID-19 drives large international trade declines in 2020."
• World Bank (2020). Trade (% of GDP).

Supporting Institutions

• EuroMeSCo: A network of think tanks and institutions focused on Euro-Mediterranean cooperation.
• IEMed: The European Institute of the Mediterranean, which supports the EuroMeSCo network and is a key institution in the study.
• CASE: The Center for Social and Economic Research, which conducted the policy-oriented analysis for the study.