Tunisians uncertain about EU free trade agreement
Maghgrebia | 7 January 2008
Tunisians uncertain about EU free trade agreement
Tunisia opened up a promising new market by entering the Free Trade Zone Agreement with the European Union, but some business and political leaders caution that without protection and modernisation measures, the economic gulf between Tunisia and the EU could get worse, not better.
By Jamel Arfaoui for Magharebia in Tunis - 07/01/08
The last remaining customs barriers between Tunisia and the EU were lifted when the Free Trade Zone Agreement became effective January 1st, but Tunisian opinion remains mixed over the measure.
Noting that Tunisia is the first south Mediterranean country to establish a free trade zone with the EU, Businessmen’s Association Secretary-General Hedi Jilani said the country has entered into a new stage "full of challenges and rich in promises and ambitions".
Other business and political leaders, however, are less optimistic. Private enterprise director Moncef Mouallehi told Magharebia that the "agreement will be detrimental to the labour market in Tunisia, and the number of unemployed people will increase". Mouallehi added, "Tunisian consumers will seek foreign commodities and will forget our local commodities".
The Democratic Union Party concurs with the opinion that the agreement will only serve to widen the economic gulf between Tunisia and the EU. In an editorial, the opposition party newspaper warned, "[This] situation doesn’t serve...Tunisian products", adding that "in the absence of protection, Tunisia and similar countries will be just a market to consume all the products of European industrial machine whenever the citizens have the means and purchasing power."
It would have been better were a free trade agreement "on the level of the Arab Maghreb countries or the Arab region" to have preceded the EU partnership, the party argued. The agreement with Europe would have thus "involved the entire region [and provided] much better negotiation conditions."
The free trade zone between Tunisia and the EU is a "double-edged weapon", said Young Leaders’ Centre director Monia Jeguirim Essaidi. Tunisian enterprises will now be able to effectively promote their products within Europe, but only if they modernise their processes. If Tunisian businesses "continue with their traditional, out-of-date methods", Essaidi told Magharebia, "they [will] shrink and then wither away; something that would result in more difficulties in the job market and economic life in general".
According to informed sources speaking to Magharebia on condition of anonymity, Tunisian authorities may resort to raising consumption tax. In exchange, Tunisian consumers would have more choices in the local market, especially of industrial materials and domestic electrical appliances. This would force local manufacturers to improve the quality of their products and to offer them at competitive prices.
Economic experts say that to further boost its economic and trade integration into the Euro-Mediterranean sphere, Tunisia will also try to benefit from bilateral free trade agreements concluded with Morocco, Jordan, Turkey, the European Association for Free Exchange (Norway, Switzerland and Iceland) and the Agadir Agreement with Morocco, Egypt and Jordan. This is in addition to its ratification of the Pan-Euro-Mediterranean protocol on rules of origin. Tunisia faces an important deadline set by the Barcelona Declaration, which aims at establishing a Euro-Mediterranean free trade zone by 2010. This would open an area of more than 700 million consumers.
Negotiations are still under way regarding products in the farming sector for the new Freone agreement with the EU.
