Marín to reveal Euro-Med partnership progress

Date: 06/06/1996

THREE vital pieces of the EU's Middle East strategy are falling into place, Commissioner Manuel Marín will tell Union foreign ministers when they meet next week.

The march towards economic and political partnership with Egypt, Jordan and Lebanon continues, and the latter two may have fully-fledged association agreements with the Union by the end of the year.

All three are part of the Euro-Mediterranean strategy, which foresees free trade in industrial goods and services between EU member states and a dozen North African and Middle Eastern partners by 2010.

Talks with Jordan began in July last year and negotiations on bringing down tariff barriers have reached an advanced stage, say Commission officials, who add: “We think we can conclude the discussions rapidly.”

Officials report similar progress with Beirut. Although Lebanon would suffer financially if it opened its markets to competition and the government is still mulling over some of the proposed commercial concessions, Beirut has accepted the general structure of agreement.

Lebanese Prime Minister Rafik Hariri has been to Brussels twice in the past month seeking both political support and financial aid for a massive, post-war reconstruction effort. Brussels could also be the site of an international donors' conference for Lebanon this month.

During his last visit at the end of May, Marín and Commission President Jacques Santer told Hariri that a political push was needed in Beirut for the talks to be finalised.

“We hope that by September, things should be close enough for finishing talks,” said a Marín aide this week.

But no such optimistic scenario is painted for Egypt. Since the fifth round of negotiations in January, Cairo has asked for a time-out to consider the EU's economic demands.

Egypt had said it would agree to open its industrial markets completely, as requested by the Union, if the EU would in turn open its markets to Egyptian agricultural produce.

The Commission's rejection of the deal caused Cairo to rethink its offer.

“They need some time for the dust to settle,” said a Commission official. “I don't think there will be much movement before September.”

But for Egypt, an association accord with the EU is a key part of its strategy to transform and beef up its own economy, as well as to integrate the country into the regional economy. As foreign aid flows into Egypt have declined, Cairo has realised it needs investment.

To get the full benefit of the Euro-Med partnership, Egypt recently began to coordinate work with its neighbours on cumulative rules of origin, promoting the co-production of goods to get them on to EU markets.

Union officials take heart from this development. “Industry and farmers need more time to accept the accord, but the government has understood it is necessary and they are serious about the partnership,” said one.

An English-language weekly newspaper in Cairo, the Al Ahram, has also begun publicising the benefits of linking hands with the Union in many domains, saying it provides Egyptians with resources their government does not have, such as money for university exchanges.

Egypt's economy is generally considered to be in good shape, with a budget deficit at 1.3&percent;, inflation at 6.3&percent;, and growth at 4&percent;. EU officials say that growth rate is not bad, but not wildly impressive given the country's small economy. The Union is insisting Egypt open its industrial and service markets 100&percent; to European competition, but is ready to negotiate a calendar for a progressive dismantling of import tariffs.

In April, the EU hosted a donors' conference for Egypt's social fund for development, which is designed to compensate those adversely affected by economic reforms. The conference raised 500 million ecu for the period 1997-2000.

But human rights advocates are unhappy with the way negotiations with all three countries have been conducted.

They have been pushing Commission officials to give the Middle Eastern governments' human rights policies a higher priority in discussions, but say the Commission has responded only in vague, unconvincing terms.