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Reviving the Maghreb Union through economy before politics

Dar Al-Hayat, Lebanon

Reviving the Maghreb Union through Economy before Politics

By Samih Massoud, Al-Hayat

11 March 2007

Foreign ministers of the Arab Maghreb Union (AMU) announced at the conclusion of their 26th round in Rabat that they would establish a Maghreb investment and trade bank owned by the central banks of the five AMU member states (Morocco, Tunisia, Algeria, Libya and Mauritania) with an initial capital of $1 billion, i.e. sevenfold the total assets of their commercial banks.

In their statement, the ministers affirmed that the Arab Maghreb’s decision was strategic and crucial at that stage, promising that their governments would activate co-operation agreements among member states to establish a common Maghreb market, gradually cancel tariff barriers, and free trade and the movement of capital and investments.

Surprisingly, the content of the statement sounds as if the AMU was in best shape, although it has noticeably been into a blind alley since 1994, the date of the last regular AMU meeting in Tunis.

Moreover, the agreements highlighted by the statement to be activated are not the result of the current situation. Rather, they were sealed in the early years of the AMU. They are 37 agreements that expressed many aspirations in different economic, commercial and financial fields, and aimed to consolidate cooperation between the AMU member states through an economic integration that would help them maximize their economic resources efficiently and lucratively, increase the competitiveness of their economies, and ensure them a suitable status in global markets.

The early aspirations of the AMU were not confined to this, but extended to include other social and political domains, such as human resources and curricula development. In addition, the union aimed to open broader horizons of dialogue on cooperation and integration, including dialogue between legislative councils to set up a Maghrebi legislative council similar to that of the EU.

The question now is; what are the goals and aspirations achieved by the AMU after 18 years of its establishment?

There is consensus that the AMU has not achieved anything so far. It has not brought the least degree of integration among its member states, whose inter-trade is still within 3% of the volume of the Maghreb foreign trade. It did not overcome the many obstacles and challenges that faced it in the context of many negative interactions that resulted from the AMU capitals’ failure, since 1994, to hold annual regular conferences to resolve any disagreements and tensions in their relationships and revitalize the AMU.

The irony is that while the AMU failed to achieve the minimal level of success over the past years, some of its member states managed to conclude economic partnership agreements with other countries and blocs. This resulted in the establishment of free trade zones with the EU, the US as well as some Arab countries, such as the Agadir Agreement, which included Morocco, Tunisia, Jordan and Egypt. All of Agadir Agreement member states concluded partnership agreements with the EU, and are seeking gradual tariff cut on commodities and products in the country of origin to reach a complete cancellation of tariffs before the Euro-Mediterranean Free Trade Area (EU-MEFTA) kicks off in 2012.

Without going into the thorny details of the failure of the AMU, I will only refer to two main reasons whose significance is based on the nature of the Maghrebi conditions.

First, the consequences of the well-known Morocco-Algeria dispute over the Western Sahara prompted Algeria to close its border with Morocco, negatively affected the AMU and exposed it to further stalemate, especially that the two countries concerned are the most prominent members of the union. The combined population of Morocco and Algeria constitutes about 76% of total AMU population, and their GDP is 68% of the union’s, and their exports are more than 50% of its exports.

Second, some political incidents in the Maghrebi scene in the past years reduced the inter-Maghrebi co-operation, and kept the region away from taking any joint actions within AMU framework and aborted any attempts to do so.

In this respect, it is significant to note that the Maghreb countries were committed to implementing the UN Security Council resolution imposing a blockade on Libya, and their contribution to an air ban, which made Libya shun the AMU and refuse to preside over it for years.

Also, the security crisis that befell Algeria forced it to focus on internal affairs and distance itself from the AMU’s concerns, despite the fact that it chaired it in 1994 and Libya agreed to assume it just two years ago.

Another crisis has recently surfaced when Libya imposed visa requirements on nationals of all Arab countries, including those of the AMU, but made a special exemption to Tunisians. This will definitely affect the march of the union negatively, because the decision impedes one of AMU’s most important goals concerning the people’s freedom of movement around the member states. Without this freedom, the achievement of a common Maghrebi market will be impossible.

The question now is: can the challenges facing the AMU be circumvented through the establishment of the aforementioned bank? Or does the starting point lie in facing these challenges and finding an effective solution to them in order to overcome the pending disputes, especially between Morocco and Algeria? In fact, it is very difficult to build the Maghrebi system and achieve the aspirations set out in the abovementioned foreign ministers’ statement without real reconciliation between Morocco and Algeria, as they constitute the leverage of Maghrebi joint action. They hold the same pivotal roles France and Germany hold in the EU; hence the real account on reviving the AMU and achieving is integration aspirations.

The Maghrebi countries are required more than ever to win the bet through finding a joint economic and commercial ground, away from the political effects, to build a system of interchangeable economic interests and pave the way for the desired integration; which will achieve not only more power and benefits to its countries, but will also be their means to survive in a world controlled by giant economic blocs.

*Mr. Samih Massoud is an economic Expert with the Canadian Center for Middle East Studies