COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - To prepare the VI Meeting of Euro-Mediterranean Ministers of Foreign Affairs, Naples, 2-3 December 2003 (Barcelona VI)

Introduction

1. At their VI meeting in Naples Foreign Ministers of the Euro-Mediterranean Partnership will want to send a message of common interests, shared values and solidarity between Europe and its Southern neighbours; to reaffirm their joint interest in reinforcing security and stability in the region; and to ensure that extreme fundamentalism and terrorism are not allowed to get in the way of progress in political and economic reform. Furthering a process of dialogue and co-operation in order to improve mutual understanding is essential to the vision of the Barcelona Process. The partnership stands as the best way of meeting the challenges confronting all the partners whether in the field of threats to security, the problems and opportunities posed by migration, economic globalisation or the environment. That vision, which has always been at the heart of the process, is even more relevant in the present circumstances.

2. Beyond the political message of solidarity, Ministers will wish to review progress in implementing the partnership and conclude work on three specific issues:

- The Euro-Mediterranean Parliamentary Assembly

- An EIB majority owned subsidiary Euro-Mediterranean Bank or a reinforced EIB lending Facility for Euro-Mediterranean Investment

- The Euro-Mediterranean Foundation for the Dialogue of Cultures

Agreement on these three issues will foster greater political co-operation; more focussed support for economic reform and private sector development; and moves to promote inter-cultural dialogue and understanding. All three will move the focus of the partnership further into the domain of civil society, thus producing results that are relevant to the man and woman in the street.

As regards working methods, the Valencia Action Plan agreed by Foreign Ministers at their meeting in April 2002 is the most recent comprehensive set of commitments for developing the Partnership. It was reviewed at the mid-term Ministerial meeting in Crete; Ministers should again take stock of progress, and provide orientations for future work, along the lines set out in the present Communication.

3. Ministers should also review progress on the implementation of the Wider Europe/New Neighbourhood Policy - the importance of which is emphasised in the draft Constitutional Treaty - and discuss how this policy can strengthen co-operation by building on the existing Barcelona Process acquis. It should help to provide the Union with new impetus to help realise the objectives of the Barcelona Declaration. The Commission will make a separate presentation to the meeting on this subject, including the prospects for the New Neighbourhood Instrument, which is therefore not covered in depth in the present Communication.

Political and security partnership

4. A concerted effort should be made in the run-up to Naples to give greater substance to political and security co-operation. It must be recognised that, while any direct linkage between the Middle East Peace Process and the Barcelona Process should continue to be avoided, it is undoubtedly true that when there have, from time to time, been positive developments in the former, they have contributed in large measure to creating a more positive atmosphere for progress in the latter. The converse is equally the case, and applies particularly to political and security co-operation. All the partners should therefore recognise their interest in implementing the Road Map and returning to negotiations.

5. The existing political and security dialogue among senior officials should therefore be pursued and should aim to agree on further partnership building measures in the field of security; if necessary such measures could be on the basis of participation by a limited number of partners, open to others to join later. The ad hoc meetings on terrorism should lead to setting up a network of contacts for early warning and exchange of information among those partners willing to do so. Other co-operation on terrorism will be pursued under existing and future regional and bilateral programmes for training and technical assistance to improve the capability to fight terrorism as well as other forms of organised crime without prejudice to respect for human rights and democracy.

6. The launching of co-operation under the ESDP (European Security and Defence Policy) is to be welcomed. The dialogue with the EU Political and Security Committee, and at expert level, can usefully add to the range of instruments available under the Barcelona Process. This dialogue should help to familiarise the Mediterranean partners with ESDP aims and instruments, and lead to their gradual involvement in a number of ESDP activities. It should reflect the fact that some of the Mediterranean partners already work with the EU in peacekeeping activities (Balkans, Africa) under the UN aegis, with a view to widening this participation in the future. Further complementary measures, such as civilian crisis management training; co-operation among civil protection authorities (continuation of the existing project on disaster management, subject to satisfactory evaluation of its results); training of civilian and military personnel on post-conflict humanitarian assistance would constitute a significant addition to partnership building. The EU should actively make the partners aware of the opportunities and encourage them to participate either individually or as a group in future ESDP operations. The Commission is willing to play its part in facilitating this co-operation.

7. Co-operation on respect for human rights and democracy is crucial to the success of the partnership. The Commission has already given a very full and precise indication of how it considers that progress should be made on this subject [1]. It proposes an approach based on dialogue with the partners in order to agree on joint action plans, which would set out the means to implement effectively the commitments which the partners have agreed to at international level through national regulation and legislation. These plans would be eligible for financial support from MEDA. In addition, the Partners willing to implement such plans would receive a premium in their national allocations under MEDA. The Ministerial meeting should be in a position to support this approach and to welcome the progress which will have been made by the Commission and the partners in setting up these action plans.

[1] Commission Communication 'Reinvigorating EU actions on human rights and democratisation with the Mediterranean partners - strategic guidelines' COM(2003) 294 final of 21.5.2003.

8. Finally under political and security co-operation it is to be hoped that the Ministers will be in a position to include a new Euro-Mediterranean Parliamentary Assembly, in a consultative capacity, in the framework of the Barcelona Process. To that end the Commission urges the European Parliament and the national Parliaments of the Euro-Mediterranean partners to reach agreement.

Economic and financial Partnership

Free trade area

9. The Barcelona Declaration sets the deadline of 2010 for the creation of the Euro-Mediterranean Free Trade Area as a 'target date'. The free trade area is being created by means of tariff dismantling under the Euro-Mediterranean Association Agreements (AA) and Agreements among the Mediterranean partners themselves. Progressive liberalisation is the objective for trade in agriculture and services. At the mid point of this 15 year timetable, the overall picture of free trade can be summarised as follows:

* North-South. Agreements have now been signed between the EU and 11 of the 12 partners. Two of them (Cyprus and Malta) are acceding countries. With Turkey, a candidate country, a customs union agreement is under implementation. With Tunisia, Israel, Morocco, Jordan and the Palestinian Authority [2], agreements are in force. Pending ratification and entry into force of their full agreements, Lebanon has signed an interim agreement and Egypt could do so soon. Algeria has so far refused to sign an interim agreement. With Syria negotiations for an Association Agreement are ongoing. The completion date of transition periods for tariff dismantling varies from 2008 (Tunisia) to 2014 (Lebanon). For Egypt and Algeria the transition period will go beyond 2014.

[2] The Agreement with the Palestinian Authority is an interim one.

* South-South. A complex proliferation of disconnected agreements with little coherence, different transition periods, sector coverage, and origin rules, has failed to build the South-South dimension of the Euro-Med Free Trade Area. Despite its continued efforts Turkey has been unable to conclude agreements with other Mediterranean partners except for Israel, with which it has an agreement since 1997. The Agadir Agreement (Egypt, Jordan, Morocco and Tunisia) seems to be a promising initiative to remedy the failure to make progress in South-South free trade, though signature is still pending following the initialling of the Agreement in January this year. The partners should be encouraged to ensure that it evolves in the direction of specific and tangible provisions on trade liberalisation, and is effectively implemented. Signature of the agreement should take place in time to permit it to enter into force before the new Member States join the EU. A MEDA-financed support programme for its implementation has been approved.

* Diagonal. In July 2003 the Euro-Mediterranean Trade Ministerial Conference agreed to extend the pan-European origin cumulation system to the Mediterranean partners. Diagonal cumulation between three or more countries with FTAs among themselves will be possible after the inclusion of the new model of origin protocol in the Association Agreements.

The elements of the free trade area envisaged by Barcelona are thus being steadily implemented even if the pace, especially as far as South-South trade is concerned, is slower than hoped for. The process is in practice already irreversible.

10. In this context the following new steps for deepening and extending the Euro-Med free trade area should be considered:

* Further Reciprocal Liberalisation of Agricultural Trade. All Association Agreements include provisions for further liberalisation of trade in agriculture and fisheries. So far, additional protocols on further agricultural liberalisation have been concluded with two countries (Tunisia and Israel) and discussions are well advanced with Morocco. In the Agreement with Lebanon, a more open approach on agricultural liberalisation is based on a negative list of restricted products, instead of on a positive list of totally or partially liberalised items.

The Commission, following the recommendation in the Valencia Action Plan, is carrying out a study on the impact of liberalisation of trade in agriculture, which should be ready by the end of the year. The reform of the CAP adopted on 26 June 2003, and the negotiations in the Doha Development Agenda, will open new opportunities for improved access to the EU market. The objective for the completion of the Euro-Mediterranean free trade area should be to build on the existing approach to achieve a higher level of progressive reciprocal liberalisation. Further progressive liberalisation in agriculture should be coupled with comprehensive and balanced rural development of Mediterranean Partners and the protection of consumer safety in the Euro-Mediterranean free trade area. A more open EU agriculture market will offer new outlets for Mediterranean Partners' exports. The process of liberalisation should be consistent with the sustainable use of the scarce water resources and environment protection, due to be discussed at the forthcoming meeting of Agriculture Ministers in Venice. The European Commission is moreover conducting a sustainability impact assessment of the free trade area.

* Free trade in Services. In their provisions on Services, Euro-Mediterranean AAs differ widely. Some include provisions on the right of establishment and commercial presence (Jordan, Algeria). In others there are rendez-vous clauses for further liberalisation of services (Morocco, Tunisia, Lebanon, Jordan). The Conference of Trade Ministers in Palermo adopted a regional approach whereby a framework protocol should be agreed with partners as a basis for entering into bilateral negotiations.

* Regional Integration. The role of customs in facilitating legitimate trade is important. In Palermo, Trade Ministers adopted a set of measures in the field of the simplification of customs procedures. It is now up to the Mediterranean countries to implement these measures which will benefit economic operators as well as customs administrations.

Besides the simplification of trade-related procedures, trade liberalisation depends also on the convergence of technical regulations and regulatory provisions relating to the free movement of goods. In Palermo, Trade Ministers launched a new initiative on the approximation of legislation in the field of standards, technical regulations, and conformity assessment procedures, which constitutes an essential step towards the establishment of the free trade area. The objective would be to conclude agreements with interested parties that would allow certain products to enter the internal market freely, without additional testing and certification.

* Multilateral Free Trade. Once the Agadir Agreement has been signed, other partners should join it. Mediterranean partners are also encouraged to make progress towards free trade among themselves. This implies the signature and implementation of genuine Free Trade Agreements between Mediterranean partners as soon as possible, in order to complete the common commitment of an overall Euro-Mediterranean Free Trade Area in 2010. The other Mediterranean partners should also be encouraged to respond positively to Turkey's attempts to conclude free trade Agreements with them.

In the light of these proposals Ministers could agree to the following steps to complete the free trade area.

STEPS TO COMPLETE THE EURO-MEDITERRANEAN FREE TRADE AREA

a) By 1 May 2004, when the ten new Member States join the EU, all the Euro-Mediterranean Association Agreements already signed should be ratified, the Agadir Agreement should be signed and ratified, and the negotiations with Syria should be completed. The Protocol on rules of origin to all agreements should be replaced by the pan-Euro-Mediterranean Protocol.

b) The study on the impact of liberalisation of agricultural trade should be completed by December 2003. In line with its conclusions, the Commission should be invited to propose in the first half of 2004 a precise road map for building on existing arrangements to achieve a higher level of progressive reciprocal liberalisation.

c) Technical assistance and training co-operation programmes should be put in place with Mediterranean partners in order to promote convergence of regulations and standards with those in the EU internal market.

d) The forthcoming Trade Ministers' Meeting in 2004 will review the progress achieved concerning trade liberalisation in services along the lines of the approach in Palermo. The establishment of a Framework protocol common to all Mediterranean countries will serve as a basis to ensure coherence. Bilateral negotiations should then be engaged and cover substantially all sectors. Although some nuances in the pace and coverage are not excluded, the ultimate objective is to reach homogeneous liberalisation across the Euro-Mediterranean region.

e) A progress report regarding the implementation of the Action Plan in the field of the establishment of free trade on industrial products should be presented by the Working Group on Regional Integration to the forthcoming Trade Ministers' Meeting in 2004. Specific technical assistance programmes and projects in the Mediterranean region should be used to support this Action Plan and eventually the conclusion of conformity assessment agreements.

f) The Agadir Agreement should be extended to other Mediterranean partners. Other Mediterranean partners should agree to enter into free trade with Turkey.

More investment for more jobs

11. There is general consensus that the lack of sufficient private sector development and investment in the Mediterranean partner countries is a major impediment to higher growth rates and creation of employment. The EU considers that the priority for EU investment support should be the private sector and, in March 2002, the European Council in Barcelona decided to enhance EIB activities through the creation of a Facility within the Bank (FEMIP). This facility started its activities on September 2002. The Commission has undertaken an Extended Impact Assessment of FEMIP, covering both options currently under consideration, i.e. retaining FEMIP or incorporating it into an EIB majority-owned subsidiary (see COM(2003) 587 Final of 15.10.2003). A Council review of the policy choice to be made is scheduled for 25 November 2003. This review and its outcome will be an important element for the conclusions of the Naples Conference.

12. Without prejudging the Council conclusions, the primary objective should be an enhanced focus on the private sector. Mediterranean partners will only be able to reap the full benefits of free trade if it is accompanied by an acceleration of the development of the private sector, which in turn depends on an acceleration of economic reforms. Domestic and foreign private investment should become the main engine of growth and job creation in the region; the region must be made more attractive to investors by the maintenance of a stable macro-economic framework, substantial regulatory and institutional reforms and approximation with international best practices. Successful economic policies will require bolder reforms in Mediterranean partners. The adoption and implementation of a Euro-Mediterranean Charter for Entrepreneurship is envisaged to serve as a reference document for streamlining policies to support SME creation and development, and improving the business environment. These issues must continue to be covered in depth in the structures put in place under the implementation of the Association Agreements, and can be further promoted in the context of Wider Europe.

13. Research and Technological Development (RTD) is an important tool for the economic stability and growth of all countries around the Mediterranean. The EU already has Agreements with Cyprus, Israel, Malta and Turkey associating them to the RTD Framework Programme. Agreements have recently been signed with Tunisia and Morocco, and negotiations are under way with Egypt, for Scientific and Technological Co-operation Agreements.

14. The opening of the European Research Area to all Mediterranean Partners will strengthen regional integration in the short term and will contribute to sustainable growth, high added value job creation, and to the setting up of competitive economies in the region. The objective of the ERA, opened to the entire Mediterranean region, is to transform the EU into the most competitive knowledge-based society of the world, according to the Lisbon objectives. The co-operation of the EU and its Member States with the Mediterranean Partners in that field has developed since the establishment of the Partnership, and plays a catalytic role for the achievement of the Free Trade Area. Synergies are therefore necessary between different EU instruments, like MEDA and the Framework Programme for RTD, to support research and innovation building in the Mediterranean Partners.

Infrastructure interconnection

15. An integrated and investment-friendly Euro-Mediterranean region requires efficient telecommunications, transport and energy networks. Following the results of the Euro-Mediterranean Conference of Energy Ministers on 21 May 2003, energy interconnections and infrastructures will be discussed in a Conference in Rome in December a few days before the Conference in Naples. The objective is to consolidate existing links, facilitate new investments and develop common strategies and co-ordinated policies. Safe and competitive regional and sub-regional infrastructures, as well as the necessary sector reforms aiming at opening the markets, are essential to promote trade, improve the competitiveness of Mediterranean partners' exports and facilitate the access of goods, services and energy resources to each others' markets.

16. The Ministerial meeting in Naples should welcome developments in this area, in particular the energy priorities 2003-2006 agreed in Athens, and encourage the initiatives taken on this occasion concerning the Maghreb electricity market, the tripartite Working Group between Israel, the Palestinian Authority and the European Commission on energy interconnections, and the need to provide the Euro-Mediterranean Energy Forum with an ad hoc logistical support.

17. As regards transport co-operation, Ministers in Naples should encourage the progress achieved so far, in particular the on-going work under the Euro-Mediterranean Transport Project, which should lead to the definition of a regional transport infrastructure network and the identification of a list of priority projects. They should also support the early launch of new regional projects in the field of maritime safety and navigation by satellite (GALILEO), and welcome the start of discussions on air transport issues in the framework of the Euro-Mediterranean Transport Forum.

18. The meeting should welcome progress made in establishing a Euro-Mediterranean communications infrastructure for research and education (EUMEDCONNECT). Ministers should confirm the importance of the rational and economic use of water in the region and encourage the further deepening of regional and sub-regional co-operation on this issue including through the Mediterranean component of the EU water initiative. Ministers should emphasize the need to give significant consideration to infrastructure interconnection projects in the framework of the new neighbourhood instrument. They should also confirm that sub-regional co-operation should be particularly promoted in this context, particularly in the Maghreb.

19. Ministers should stress the need for environmental protection and sustainable development policies to be implemented This should be pursued along the lines of the Declaration of the Euro-Mediterranean meeting of Environment Ministers in Athens in July 2002 and the Plan of Implementation of the Johannesburg World Summit on Sustainable Development. The environment should be integrated into all sectors of the Partnership.

Social, Cultural and Human Partnership

20. In the field of intercultural dialogue the Ministerial meeting should agree to enhance the achievements of the Partnership by strengthening the present instruments and regional programmes and, at the same time, ensure the launching of new instruments, principal among which is the Euromed Foundation, which will be the most visible aspect of activities in this field.

21. Ministers should welcome the successful implementation of ongoing programmes: Euromed Heritage entering its phase III in 2003, Euromed Audio-visual preparing its phase II, Euromed Youth preparing its Phase III, and, finally, the launching of the Euromed Youth Platform supporting dialogue between youth representatives and governments on policies for young people.

22. The setting up of the Euromed Foundation, to promote the dialogue of cultures and civilisations, should be finalised in Naples. Launching this new independent instrument will send a clear message of commitment to a broad Euro-Mediterranean intercultural dialogue. The Foundation should become a catalyst for all initiatives aiming at increasing dialogue and common understanding. Its organisation, as a network of networks with a light administrative structure, will allow a regular dialogue, notably between cultural circles outside official diplomatic and cultural forums. Partners should confirm their readiness to make substantial financial contributions in order to guarantee the successful launch.

23. The report of President Prodi's High Level Group ("Groupe des Sages") presented in October in Alexandria will help to define the main principles for the dialogue of peoples and cultures in the region that should guide the functioning of the Foundation.

24. Ministers should take note of the progress made in the implementation of the regional programme covering the justice, police and migration sectors. For the first time in the framework of the partnership, experts and practitioners from the Euro-Mediterranean countries will work together in judicial co-operation, in the fight against terrorism, drugs and organised crime; and in a joint approach to migration. Partners should assure full support for this first experience of concrete teamwork, on training of judges, training of police forces and the development of a common tool of observation and analysis of the migratory flows in the Mediterranean. If successful, these actions could significantly improve partnership in these sensitive areas and possibly lead to a more ambitious programme in the future.

25. Ministers could reaffirm the importance of migration and express the view that, if carefully managed, migration can be a positive factor for the socio-economic growth of the whole region. The dialogue and co-operation on migration that has started with some Mediterranean Partners should be extended to all and should cover the root causes of migration, the possibilities to promote legal migration and to combat illegal migration. Formal readmission negotiations are now taking place between the EC and Morocco. This should be repeated for other partners. On this sensitive subject, that needs to be part of an overall migration strategy, success is dependent on finding a balanced global approach to migration, which does not focus on technical provisions alone. Ministers should confirm an approach balancing security concerns and the management of migratory flows on the one hand, with social integration of migrants on the other.

26. Ministers should agree to increase efforts in education as a basic tool for intercultural dialogue and mutual understanding. At regional level, EU programmes newly opened to the Mediterranean partners are an important step in this direction. The Tempus extension to the Mediterranean Partners will reinforce co-operation in higher education and post-secondary vocational training, and allow the authorities to proposed specific structural actions. The Alexandria Conference on Higher Education Co-operation and Intercultural Dialogue across the Mediterranean formally marks the launching of the programme and has brought together academic and political representatives from the European Union and the Mediterranean Partners to discuss prospects for the development of higher education co-operation and intercultural dialogue, in line with the new neighbourhood policy framework. The Netd@ys and eSchola programmes for improving the use of new technologies in primary and secondary education contribute to the improvement of the sector. Ministers should also support the efforts of the forthcoming regional programmes on training and on the role of women in economic life.

27. Ministers should also welcome the increasing role of civil society in the Barcelona process. In addition to civil society participation in Barcelona cultural programmes, the meeting should note the achievements of the Naples Civil Forum held prior to Barcelona VI. Within this Forum, civil society organisations should be able to agree on ways to ensure continuity and coherence in their activities and thus increase the effectiveness of their influence on the Partnership.

Conclusions and recommendations

28. The Valencia Action Plan adopted by Euro-Mediterranean Ministers on 23 April 2002 has been the framework of the activities in the partnership for the last year and a half. The consolidation of its achievements requires the adoption of important decisions and new initiatives.

29. The common goal of the Partnership is a stable, more prosperous Southern Mediterranean in close, positive interdependence with Europe. The Wider Europe policy should help to provide the Union with new impetus to help realise the objectives of the Barcelona Declaration. The policy will support the efforts of the Mediterranean partners to ensure social cohesion and economic dynamism and to make substantial progress in the implementation of the political, institutional and economic reforms necessary to reap the benefits of free trade. The Wider Europe national action plans will constitute a catalyst for a more dynamic and ambitious Barcelona Process agenda.

30. In accordance with these objectives, the Commission recommends that the following decisions and initiatives are taken by Ministers in the Naples Conference. These actions can be taken within the present budgetary framework and do not imply the need for new resources under the current Financial Perspectives.

Recommendation 1

Ministers should reaffirm their commitment to the Barcelona Process as the framework for co-operation to ensure solidarity between the EU and its southern neighbours to promote political and economic reform for security and stability.

Recommendation 2

Ministers should welcome the introduction of the Wider Europe New Neighbourhood Policy and agree that it should be used to give a new dynamism to achieving the objectives of the Association Agreements and of the Barcelona Process in all its sectors.

Recommendation 3

Political and Security Dialogue should be pursued and new partnership building measures should be agreed in the field of security with interested partners. This dialogue should lead to the involvement of the Mediterranean partners in a number of ESDP activities and complementary actions, notably networking civil protection authorities and possible training in crisis management.

Recommendation 4

Ministers should support the approach proposed in the Commission Communication on Reinvigorating Actions on Human Rights and Democratisation, and encourage its implementation jointly by the EU and each Mediterranean Partner.

Recommendation 5

Ministers should be in a position to include a new Euro-Mediterranean Parliamentary Assembly, in a consultative capacity, in the framework of the Barcelona Process.

Recommendation 6

Ministers should agree on the necessary steps to be taken to complete the Free Trade Area: increased reciprocal liberalisation of trade in agriculture and services, ratification of pending Association Agreements, replacement of the protocols on the rules of origin by the pan-Euro-Mediterranean Protocol, entry into force of the Agadir Agreement. The initial elements should be in place by the time the new Member States join the EU on 1 May 2004.

Recommendation 7

In line with the decision which will have been taken by EU Ministers, the Partners should agree on appropriate measuresto enhance private investment and the private sector in partner countries, bearing in mind the recommendation by the Commission regarding FEMIP (see COM(2003) 587 Final of 15.10.2003).

Recommendation 8

In order to increase support to innovation building and research in the Mediterranean area, Partners should seek to reinforce synergies between EU instruments, such as MEDA and the Framework programme for Research and Development.

Recommendation 9

Partners should confirm their active support to infrastructure development in the region, in particular by implementing the necessary sector reforms aiming at progressively opening their markets and fostering private investment. They should also emphasize the role of sub-regional co-operation in this respect.

Recommendation 10

Sustainability should be integrated into all sectors of the Partnership through a mainstreaming approach; the Mediterranean component of the EU water initiative should be developed.

Recommendation 11

Partners should confirm their readiness to make adequate financial contributions for the launching of the Euro-Mediterranean Foundation for the dialogue of cultures and civilisations and agree on the modalities for setting it up.

Recommendation 12

The importance of increasing joint efforts in education as a basic tool for dialogue and mutual understanding should be emphasized.

Recommendation 13

Partners should welcome progress on the regional programme covering justice, the fight against terrorism, drugs and organised crime, and co-operation in the field of migration, and look forward to the further development of such co-operation.