Communication from the Commission on the Euro- Mediterranean partnership and the single market
Date: 1998-09-23
Institutions: European Commission
Subjects: Mediterranean third countries, association agreement (EU), cooperation policy, free-trade area, single market

COMMISSION OF THE EUROPEAN  COMMUNITIES 

Brussels, 23.09.1998 
COM(1998) 538  final 

COMMUNICATION  FROM THE  COMMISSION 

ON THE  EURO-MEDITERRANEAN  PARTNERSHIP 
AND THE  SINGLE  MARKET 

COMMUNICATION  ON THE EURO-MEDITERRANEAN  PARTNERSHIP  AND 
THE SINGLE  MARKET 

I. 

INTRODUCTION 

Relations  between  the  European  Union  (EU)  and  its  Mediterranean  partners1  entered a 
"new  phase  aller  the  adoption  of  the  final  Declaration  of  the  Barcelona  Conference  on 
27-28  November  1995.2 The  parties  agreed  on  the  objectives  of  their  future  partnership 
and  committed  themselves  to  achieving  these  objectives  through:  a)  strengthened 
political  dialogue  on  a  regular  basis,  b)  the  development  of  economic  and  financial 
cooperation, and c) greater emphasis on the social, cultural and human  dimension. 

The  aim  of  the economic and financial  partnership  is the creation of an area of shared 
prosperity. Taking  into  account  the different  degrees  of  development,  the economic  and 
financial  partnership will be based on: 

- 

- 

the  progressive  establishment  of  a  free  trade  area  in  goods  and  the  progressive 
liberalisation of trade in services; 

the  implementation  of  appropriate  economic  cooperation  and  concerted  action  in  the 
relevant areas; 

-  a substantial  increase in the European Union's financial  assistance to its partners.  This 
approach  was  confirmed  by  the  second  Euro-Mediterranean  Conference  in  Malta  on 
15 and  16 April  1997. 

In its Communication  Agenda 2000 For a Stronger and  Wider Union 3 the  Commission 
stressed  that  active  measures  will  have to be taken  to reinforce  links  between  the  Union 
and  its  Mediterranean  partners.  It  went  on  to  say  that  the  stable  development  of  the 
southern  Mediterranean  rim  is  a  challenge  of  ever  increasing  proportions  and  that  the 
potential of the Barcelona process will have to be fully exploited to that end. 

Furthermore,  the  Commission  stressed  that  enlargement  of  the  Union  should  lead  to an 
intensification  of  economic  and  trade  relations  between  the  European  Union  and  its 
southern  partners,  based  on  the  pursuit  of  mutual  interest.  The  Commission  has  thus 
given  a clear  signal  that  enlargement  to  the  East  will  not  take  place  at  the  expense  of 
relations with the European Union's southern partners. 

1  Algeria, Cyprus, Egypt,  Israel, Jordan, Lebanon,  Malta,  Morocco, Syria,  Tunisia,  Turkey,  Palestinian 

Authority. 

2 

Final Declaration and Work Programme, Barcelona Euro-Mediterranean  Conference  (27-28 November 
1995). 

3  COM (97) 2000. 

-2  -3-

H. 

PURPOSE OF THE  COMMUNICATION 

This  Communication  aims  to  explore  ways  of  integrating  the  objectives  of  the 
Barcelona  Declaration  and  a  number  of  specific  areas  of  Single  Market 
achievements  with  a  view  to  accelerating  the  creation  of  an  area  of  shared 
prosperity. 

The  Barcelona  Declaration  and the conclusions of the Malta Ministerial  Meeting provide 
the  basis  for  the  identification  jointly  by  the  European  Union  and  its  Mediterranean 
partners  of  actions  which  will  enhance  the  benefits  accruing  to  all  concerned  of  the 
gradual establishment of the Euro-Mediterranean  Free Trade Area. The experience gained 
when setting up the European Single Market will be highly useful  in this respect. 

The  Euro-Mediterranean  Association  Agreements  provide  for  the  possibility  of  taking 
further  measures, by mutual  agreement, to develop the partnership. This  Communication 
outlines a number of areas where the Commission  considers that action can most  usefully 
be taken. The proposals contained in this Communication  will come into effect  only once 
the  necessary  political  choices  have  been  made  to  conclude  negotiations  for  the 
Association  Agreements. The  priorities and  timetable  for  actions  will  have to  be agreed 
between the European  Union and its Mediterranean partners. 

HI-  THE FREE TRADE AREA 

The  free  trade  area  in  goods  and  the  progressive  liberalisation  of  trade  in  services 
between the parties will form  an important instrument, together with the support given to 
specific  actions  through  MEDA,  in  achieving  an  area  of  shared  prosperity  based  on 
sustainable and balanced economic and social development. The parties have set the year 
2010 as the target date for  the gradual  establishment  of  this  area, which  will cover most 
trade with due observance of the obligations resulting from the Work! Trade Organisation 
(WTO) and with due respect to environmental commitments. 

For  this  purpose,  new  Euro-Mediterranean  Association  Agreements,  which  include  the 
establishment  of  a  free  trade  area  in  goods  and  progressive  liberalisation  of  trade  in 
services,  are  being  negotiated  with  the  partners..  Some  agreements  have  already  been 
concluded  and  negotiations  are  weft  underway  with  others.4  Free  trade  agreements 
between  the  Mediterranean  partners  themselves  are  for  the  most  part  still  to  be 
negotiated. 

Increasing  regional  and  sub-regional  cooperation  is  a  prerequisite  for  attaining  the 
objectives set out in the Barcelona Declaration. 

The European  Single Market  itself  goes  much  further  then  a free trade  area,  The  Single 
Market  is  the  fruit,  of  economic  integration  between  the  Member  States  of  the  Union 
brought  about  by  the  Single  Market  programme  of  legislation  which  aimed  to  remove 
barriers to trade. 

Creating  a  Euro-Mediterranean  free  trade  area  does  not  amount  to  creating  a  Single 
Market  between, the  Mediterranean  partners.  However,  the  European  Single  Market  has 

4 

State of EU-MED Association Agreements-in Annex I. 

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demonstrated  the  benefits  which  can  be derived  from  free  trade  between  open  markets: 
economics of scale  in  production,  rationalisation  of  production,  increased  efficiency  and 
price reduction  as a result of  increased competition. Common  interests have resulted  in a 
set of policies which  have improved trade flows, prosperity and investment  in the Union. 
Trade  between  the  Member  States  represents  more  than  2/3  of  total  EU  trade.  Direct 
investment between Member States has increased seven times since  1987, and the size of 
the Union's Single Market and its growth potential  already constitute an asset in terms of 
attracting international  investment to Europe. 

As  barriers  to  trade  are  dismantled,  experience  gained  while  establishing  the  Single 
Market  shows,  not  only  that  trade  flows  and  investment  will  increase,  but  that 
competitiveness  on world markets will  also improve as a result  of open  economies, with 
living  standards  rising  and  inequalities  between  the  parties  being  reduced  as  a 
consequence. 

IV. 

SUGGESTED ACTIONS 

Goods  and  services  will  move  freely  in  the  Euro-Mediterranean  area  if  there  is  greater 
harmonisation  of rules and regulations. During the Malta Conference  the parties stressed 
the  importance  of  adding  a  "South  -  South"  horizontal  approach  which  would  permit 
greater harmonisation  and greater compatibility with the Union's internal market. 

The  emphasis  should  be  placed  on  issues  of  mutual  interest.  It  is  suggested  using  the 
provisions  of  the  Association  Agreements,  which  provide  for  further  action  at  bilateral 
level,  and  complementing  this  where  appropriate  by  actions  at  multilateral  level  on  a 
mutually  agreed  basis  after  discussion  within  the  partnership.  The  aim  is  to  reach  a 
consensus or to agree on actions that are of interest to all parties or to the greatest number 
of parties. 

When selecting areas for inclusion in this Communication, the Commission  took account 
of the following : 

-  objectives and goals of the Barcelona Declaration; 

-  areas of most interest and importance to the Mediterranean partners; 

-  Single Market achievements; 

-  areas where closer ties will improve trade and investment conditions; 

-  disparities between the partners. 

The  actions  suggested  apply  across  the  sectors  covered  without  prejudice  to  sectoral 
action plans already adopted by the Commission  Thus, approximation  of standards, rules 
and regulations in fields like customs, taxation, public procurement, competition  and IPR 
will  facilitate  exchanges  of  experience  between  administrations  and  will  increase  the 
scope  for  benefiting  from  a  free  trade  area.  The  Commission  realises,  however,  that 
substantial  assistance is needed before  such  approximation  can be taken to its full  extent. 
In  many cases,  institutions  will  have  to  be created.  Training  plays  an  important  role in 
raising  awareness  of  Single Market  legislation,  especially  in  the  areas  of  customs  and 
taxation,  public  procurement,  competition,  IPR  and  accounting  To  that  end,  exchanges 
in  Commission 
of  experts  and  the  participation  of  the  Mediterranean  partners 

-5-

programmes could  be highly  beneficial  in  areas  such  as IPR, financial  services  and data 
protection. Technical  assistance is offered  by the Commission  in a number of those areas 
(customs  matters  and  taxation,  public  procurement,  competition,  IPR,  data  protection, 
accounting and auditing). 

The most effective  way of proceeding in most cases will be for experts from  all members 
of the partnership to meet in each of the sectors concerned to agree on a series of overall 
objectives. Once this has been  done, implementation  of the activities, mainly at bilateral 
but  also  at  regional  level,  can  take  place  within  the  framework  of  the  procedures 
governing  the Euro-Mediterranean  partnership. The Commission  is ready to provide  the 
necessary  technical  assistance,  training  and  exchange  of  experience  to  achieve  the 
mutually agreed objectives. 

Only  by  cooperating  will  it  be  possible  to  achieve  the  objective  of  the  Barcelona 
Declaration of an area of shared prosperity. The Commission  is ready to play its part and 
to  share  the  experience  gained  in  establishing  the  Single  Market.  This  commitment 
extends to preparations for the future development of the European Union. 

The Commission considers that these activities will not only enhance the benefits  of  free 
trade between the Union and the partners5 but also will lead to an increase in South-South 
cooperation  and thus raise the level of  intra-regional trade  (currently no higher than 5% 
of the partners' total trade flows). 

V. 

SMEs 

The economies  of the Mediterranean  partners are, to a large extent, built  on  SMEs. It is 
important that a proper and adequate structure is agreed on to further  the objectives of the 
Barcelona Declaration  for SMEs. Such a structure needs to be accompanied  by measures 
that  contribute  to  their  survival  and  growth.  This  would  not  only  increase  flows  of 
investment into the economies but would also increase prosperity in the region. 

In order to achieve this, we need to ensure that the regulatory environment  is conducive 
to  business.  Information  and  advisory  services  are  important  in  identifying  potential 
markets,  for  instance,  as  are  measures  to  stimulate  long-term  cooperation  between 
European  and  Mediterranean  SMEs.  The  Commission  is  prepared  to  provide  technical 
and  legal  assistance, as well  as training opportunities  - as the case may be - for  these or 
other strategies the partners may agree upon. 

The  Council  meeting  in  Cannes  in  June  1995  agreed  on  a  financial  package  of 
ECU 4 685 million  for 
the  period  1995-99. 
the  new  Mediterranean  policy  for 
ECU 3 424.5 million  thereof  is provided  under.the MEDA  Regulation  which  covers  the 
financing of new programmes and spending related to the association agreements. 

Pursuant to the objectives  and the procedures of the MEDA programme, the Commission 
has allocated 90 % of the funds  to the beneficiary  countries on a bilateral  basis and 10% 
to horizontal or multilateral actions. 

Trade figures  in Annex II. 

Multilateral  actions  must  be  open  to all  the partners  and  must  concentrate  on exchanges 
of experience, networking and training.  Projects  will include approximation  of rules and 
régulations  as  well  as  technical  assistance.  It  is  important  that  coherence  be  maintained 
for  actions  put  forward  in  Single Market  fields  and  for  which  financing  might  also  be 
provided  via funds  for bilateral  projects. 

VII.  AREAS COVERED  BY THE  COMMUNICATION 

The  Communication  suggests  highlighting  and  examining  possible  actions  in  the 
following  areas: 

1. 

Customs and  taxation 

If an area of shared prosperity is to be created, customs and tax aspects must be taken into 
consideration.  The  Union  will  launch  initiatives  designed  to  consolidate  factors  which 
encourage trade between the two regions and, as a result, foster cooperation in the field. 

The Euro-Mediterranean  Association  Agreements are designed to boost cooperation  with 
a view to improving trade flows between the two regions in accordance with international 
rules.  Ail  the  agreements  highlight  the  streamlining  of  customs  procedures,  the 
approximation  of 
the  Single  Administrative 
Document (SAD) and non-discrimination in tax matters. 

laws/standards/schemes, 

the  use  of 

In  addition,  with  a  view  to  promoting  regional  trade,  work  will  focus  on  the  need  to 
realign  the  very  different  tax  systems  of  the  region's  countries  with  a  view  to  creating 
mutually compatible  systems in the medium  term.  This is an important  factor  favouring 
economic development and regional  integration. 

LI 

A ction programme 

The  key  elements  in  the  field  of  customs  and  taxation  enabling  an  area  of  shared 
prosperity to be created are as follows: 

- 

implementation of the rules governing cumulation of origin; 

-  approximation of  laws/schemes/standards; 

-  modernisation of customs authorities by reorganising them along the lines of the most 

efficient  models to facilitate the overall economic integration of the two regions; 

-  modernisation  of  tax  administrations  to  improve  the  operation  of  the  Mediterranean 
partners'  systems  of  indirect  taxation,  particularly  with  a  view  to  protecting  the 
financial  interests of those countries and of the European Union; 

- 

implementation  of  mutual  assistance  in  customs  matters  between  the  various 
competent authorities of the Mediterranean partners. 

/. /. / 

Implementation of the rules governing cumulation of origin 

Origin  rules are  vital  to the harmonious  functioning  of  a free  trade area.  As the  various 
phases  of  cumulation  provided  for  in  these  rules  (bilateral  cumulation,  diagonal 
cumulation  and  total  cumulation)  are  gradually  set  up  in  the  Euro-Mediterranean  area, 
increasing economic  integration  will  occur between  the  various Mediterranean  countries 
themselves  and  between  those  countries  and  the  Community.  The  Mediterranean 
partners have already expressed an interest in benefiting  from  cumulation  of origin  with a 
view to encouraging regional cooperation. 

The  industrialisation  of  these  countries  will  be  given  a new  boost  and  the  fact  that  the 
rules  of  origin  are  the  same,  thus  allowing  diagonal  and  total  cumulation,  will  be  a 
primary  factor  favouring  the development  of  trade between  the parties  and  access to the 
Community market. 

In recent  years the Community  has  begun  a process of  simplifying  and  harmonising  the 
rules of  origin  which  it  applies  in free  trade  agreements  signed  with  its  partners  with a 
view  to facilitating  trade and streamlining  procedures.  A single  text  now  applies  to the 
EFTA countries, the CEECs, the Baltic States, etc.  The Community has put forward  this 
single  text  as  a  protocol  to  the  agreements  it  is  currently  negotiating  with  its 
Mediterranean partners. 

Since the first  half of  1996, the Commission  has presented  these rules at three meetings 
of  all  the  Mediterranean  partners.  They  are  attached  as  a  protocol  to  the  agreements 
signed  with  the  PLO  for  the  benefit  of  the  Palestinian  Authority  and  Jordan.  The 
Commission  acknowledges  the  importance  which  its  Mediterranean  partners  attach  to 
origin  cumulation,  and  recently  adopted  a communication  entitled  "Euro-Mediterranean 
cumulation of origin". 

In  the  light  of  the  experience  acquired  in  previous  negotiations  of  a  comparable 
importance,  the  Commission  regards  it  as  necessary  not  just  to  offer  its  partners  the 
chance  to benefit  from  technical  assistance  and  training  initiatives,  but  also  to  organise 
regular  meetings  of  experts  in  rules  of  origin  from  the  Member States  and  the 
Mediterranean  partners at which common problems, the conditions of implementation of 
the  rules  of  origin,  their  future  development  and  the  necessary  improvements  can  be 
discussed.  Information  initiatives targeted on business circles will also be organised. 

1.2.1  Approximation of laws/schemes/standards 

Even if the free  trade area does not require this approximation  in order to facilitate trade, 
the  two  regions  have  every  interest  in  ensuring  that  approximation  of  customs  and  tax 
procedures takes place as far as is practicable.  Customs and tax cooperation can focus on 
measures affecting  factors  which enable greater approximation  and greater  compatibility 
with the Union's single market. 

The  approximation  of  customs  legislation  between  the  Mediterranean  partners  and  the 
European  Community  is  a  key  element  of  the  Euro-Mediterranean  agreements.  The 
following  initiatives may be envisaged: 

-  embarking  on  the  adaptation  and  approximation  of  legislation  in  fields  such  as  the 
Customs Code, the combined nomenclature based on the harmonised  system, the SAD 
and customs procedures; 

-  simplifying  customs procedures: use of the SAD by all Mediterranean  partners; 

-  facilitating  the  interconnection  of  all  operators  involved  in  foreign  trade  transactions 
by applying an integrated  data transmission  system  based on EDIFACT in  accordance 
with the international  standards ISO 6422 and ISO 7372; 

- 

facilitating 
non-discrimination  in the field of taxation. 

implementation  of 

the  principles  of 

transparency,  neutrality  and 

The  principle  of  non-discrimination  does  not  entail  an  obligation  for  the  Mediterranean 
partners  to  apply  exactly  the  same  rules  as  Community  operators.  However,  it  would 
facilitate trade if the standards applicable by the Mediterranean partners and the European 
Union in respect  of taxpayer identification,  tax  returns or payment of indirect taxes were 
compatible; 

-  Modernising tax systems by promoting the adoption of rules guaranteeing neutrality in 
trade  while  also  complying  with  the  budget  requirements  of  the  Mediterranean 
partners, in particular by improving tax collection. 

Experience  acquired  within  the  Community  suggests  that  legislation  will  have  to  be 
drawn  up  on  turnover  taxes  which  do  not  distort  the conditions  of  competition  or raise 
barriers to free  movement of goods between the different  countries if these objectives are 
to be achieved.  Convergence of the Mediterranean  partners' tax systems towards a model 
which  ensures  sound  financing  and  contributes  to  regional  integration  would  have  a 
positive impact.  A degree of harmonisation  of  legislation  on turnover taxes could result 
in  the  abolition  of  cascading  cumulative  taxes  and  the  adoption  by  all  countries  of  a 
value-added-tax  system which is simple, sound, effective  and broadly applicable. 

1.1.3  Modernisation of customs authorities 

International  trade  will  be  facilitated  if  customs  authorities  are  modernised  by  aligning 
them  on  the  most  efficient  models.  Infrastructure  and equipment  will  have to be taken 
into account.  The different  tax authorities must be provided with the necessary resources 
to ensure that customs procedures are implemented correctly and  swiftly. 

To that end, aid  may be required for  equipment  (logistics  necessary  for  smooth  customs 
administration  and detection/monitoring equipment) and for information  technology. 

1.1.4  Modernisation of tax authorities 

With  a view  to improving  the operation  of  the Mediterranean  partners' indirect  taxation 
systems, a Community initiative should be devised to back up the work carried out by the 
partner countries to: 

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- 

improve understanding of tax  law, particularly  in the indirect  taxation  field,  and of its 
implementation; 

-  ensure  efficient,  effective  and  wide-ranging  cooperation  between  those  countries  on 
the one hand and between  those countries  and the Commission  or the Member States 
on the other; 

-  ensure  the ongoing  improvement  of  administrative  procedures  to take account  of  the 
needs  of  authorities  and  taxpayers  by devising  and  generalising  good  administrative 
practice. 

1.1.5  Implementation  of mutual assistance in the customs field  between the various 
competent authorities of the Mediterranean partners and the European  Union 

A protocol  is  attached  to  all  the  Euro-Mediterranean  Agreements  providing  for  mutual 
assistance  in  the  customs  field  between  competent  authorities.  These  provisions 
constitute a legal  basis whereby administrative  assistance can be requested  and provided 
in connection  with investigations into fraud  or irregularities in the customs field,  in so far 
as the other partner has useful  information  for the case in question.  Investigation  and/or 
information  exchange  techniques  could  be  included  in  the  areas  Covered  by  technical 
assistance if required. 

1.2  Establishment of strategy 

The  instruments  for  putting  this  action  programme  into practice  are technical  assistance 
and training.  The Commission  may also consider  holding sectoral, thematic  or political 
conferences. 

(a) 

(b) 

(c) 

Technical assistance will help the Mediterranean partners to realign their customs 
and tax legislation with one another and with the European Union and to  simplify 
customs  and tax  procedures  and bring them  into  line  with  standard  international 
practice.  The aim is to facilitate  trade and to remove technical  and non-technical 
barriers  to  international  trade.  What  is  envisaged  are  programmes  whose  chief 
component will be the expertise of European customs and tax  officials. 

Training will  be designed to increase awareness of the new  legislation, for which 
technical  assistance  will  have  been  provided,  and  to  put  it  into  practice.  This 
instrument  will  also  be  used  to  improve  regional  cooperation  between  the 
Mediterranean  partners and to foster communication  between the various customs 
and  tax  authorities.  Training  programmes  for  instructors  will  be  held  with 
participants from  the customs  schools of the various customs  and tax authorities, 
the  aim  being  to  train  lecturers  whose  task  will  be  to  train  customs  and  tax 
officials  in each country. 

Conferences  within  the  framework  of  the Euro-Mediterranean  partnership.  The 
Communication envisages organising conferences  with the aim of enabling senior 
officials  from  the European  Union  and from  the Mediterranean  countries to hold 
exchanges  of  views  on  initiatives  and  of  encouraging  exchanges  of  information. 
The  economic  significance  of  these  conferences  will  lie  in  their  trade-boosting 
potential. 

•10-

In similar vein, meetings between Directors-General  in the customs and tax fields  may be 
envisaged  with  a view  to fostering  closer  ties and raising  the profile  of  cooperation  and 
the integration  of the "Mediterranean  economic area". 

2. 

Free movement of goods 

Free  movement  of  goods  means  movement  free  from  tariff  and  non-tariff  barriers 
throughout 
the  Euro-Mediterranean  Area.  To  achieve  this  without  reneging  on 
environmental  commitments,  quantitative  restrictions  and  discriminatory  national 
legislation  which  result  in protecting  national  markets or in closing them to competition 
of imported products must be abolished. 

2.1. 

Substance of initiatives 

Quantitative  restrictions  are not the only barriers  which  must be abolished  if the markets 
of  the  Euro-Mediterranean  partners  are  to  be  opened  up.  Non-tariff  barriers  to  trade 
include  all  discriminatory  measures  against  imported  products  and  can  take  different 
forms. The effect  of these measures is to make imports more difficult  or more costly. In 
particular,  differing  technical  rules,  standards  and  conformity  assessment  procedures 
often  create  unnecessary  barriers  to  trade  which  are  not  always justified  by  safety  and 
consumer protection requirements. 

Efforts  towards abolition of trade barriers have to be structured and continuous, because a 
large  number  of  administrations  are  concerned  (several  national  administrations  are 
involved  with  the  application  of  trade  rules). Likewise,  a  series  of  regulations  have  an 
effect  on trade (commercial regulations, regulations aiming to protect consumer health, to 
protect the environment, etc.). 

2.2.  Establishment of strategy 

Administrative  cooperation  is  an essential  working  tool  for  the  effective  operation  of  a 
free  trade  area  and  the  dialogue  and  cooperation  enhanced  by  the  Euro-Mediterranean 
partnership offers  the right conceptual  framework  for the process of opening up markets. 
Facilitating  bilateral  and  other  contacts  between  administrations  would  help  resolve 
difficulties  concerning  trade  in  products,  especially  in  the  Euro-Mediterranean  context 
where significant  differences  exist between  partners, both  in organisational  structure and 
in operational  practice. In particular, efforts  could be deployed to identify regulatory areas 
where some kind of legislative approximation  and harmonisation  of procedures should be 
attempted.  Furthermore,  the  prompt  exchange  of  information  in  case  of  difficulties 
concerning  free  trade of  goods should  assist in avoiding recourse to restrictive  measures 
or in clarifying the situation for the authorities concerned. 

The  Commission  suggests  therefore  that  an  overall  framework  be  set  up  enabling 
co-ordination  and dialogue between  partners  at bilateral  and multilateral  levels. It would 
be based on the following basic principles: 

-  solutions to problems must be shared among all the partners to maximise the  benefits 

of the free trade area; 

-  mutual  assistance  and  transparency  (cooperation  systems  require  that  the  responsible 

authorities throughout the area are known to the partners); 

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-  setting-up of  non-bureaucratic  cooperation  systems providing tangible  benefits  (to be 
effective,  mutual  assistance  implies  that  the  practice  of  administrative  cooperation 
must be tailored to what is reasonable, i.e. that authorities limit their demands on each 
other to what is essential to the task in hand). 

Implementation of an administrative cooperation policy should start with the setting up of 
a network of central contact points which will  make cooperation easier, especially when 
the responsibility for trade issues between partners is decentralised or shared. 

Cooperation  may also be strengthened by exchanges of civil  servants, training activities 
at the Commission departments in charge of free trade issues or others. 

3. 

Public procurement 

In  all  the  Mediterranean  partners  the  public  sector  plays  a vital  role  in  the  economy. 
Public procurement decisions therefore have a major impact on the economy as a whole 
and are sometimes of vital importance to individual suppliers. 

In the context of an integrated economic  area, an effective  public procurement policy is 
thus fundamental to success in achieving its objectives: to generate sustainable, long-term 
growth  and create jobs, to foster the development  of  business capable of exploiting the 
opportunities  generated  by  such  an  integrated  area  and  to  ensure  competitiveness  in 
global markets, and to provide taxpayers and users of public services with best value for 
money.  In  order  to  achieve  efficiency  in  public  procurement,  the  key  is  to  ensure 
competition between suppliers by offering them equal chances to win a bid. 

3.1 

Substance of initiatives 

The  key  elements  to  achieve  an  area  of  shared  prosperity  in  the  field  of  public 
procurement are: 

-  the application  of economically  effective  procurement  rules and practices, as well as 
the development of an effective  framework for implementation and enforcement of the 
policy; 

-  the approximation of laws, as well as the alignment of practices in the area concerned; 

-  the reciprocal and gradual liberalisation of cross-border exchanges in this field; 

-  cooperation and mutual assistance between the different  administrations concerned. 

3.1.1 

Implementation  and enforcement 

The  key to achieving  efficiency  is to ensure  competition  between  suppliers.  In practice, 
such competition  is made possible by offering  equal chances to all suppliers to win a bid. 
It is important to note that this does not necessarily mean that traditional suppliers will be 
replaced by new ones. Only that all suppliers, including traditional ones, need to come up 
with  competitive  offers  (value  for  money)  in  order  to be  able to  win  a contract.  Firstly, 
this  ensures  transparency  (announcing  purchasing  opportunities  publicly,  indicating 
clearly what the government entity intends to buy and the requirements  which need to be 
met,  setting  appropriate  time-limits  between  the  publication  and  the  award  of  the 
contracts). Secondly, real competition  requires openness (e.g. that technical  requirements 
are  not  defined  so  as  to  fit  only  the  products/services  of  one  company).  Thirdly, 

-12-

infringements  of  these  rules  could  be  addressed  through  an  appropriate  enforcement 
structure  (inter alia checks  and arbitration), and  aggrieved  bidders  must, in any event, be 
able to challenge any unlawful  decisions before a national body. 

While  it  is  essential  that  an  effective  legislative  framework  should  be  in  place,  it  is 
equally  important  that  the  rules  are correctly  applied  and  that  practices  respect  the  legal 
environment.  Open  and  transparent  procurement  not  only  provides  suppliers  with 
increased  opportunities,  but  contributes  strongly  to  their  increased  confidence  in  the 
reliability  of  the administration  as a business  partner.  It also has wider ramifications,  by 
promoting  confidence  in  the  country's  overall  commercial  legal  framework.  In  this 
regard, it is important that an effective  framework  for implementation  and enforcement of 
the  policy  is  developed.  Experience  suggests  that  specialised  independent  authorities 
entrusted  with  monitoring  powers  could  play  a  key  role  in  improving  procurement 
systems. They could provide useful  advice to contracting entities and check procurement 
practices  to promote  efficiency.  Moreover,  the  very existence  of  such  an  authority  may 
prevent  behaviour  giving  rise  to  complaints,  thereby  reducing  the  potential  burden  on 
national  courts  and  tribunals.  Such  authorities  might  also,  in  some  cases,  handle 
complaints. 

3.1.2  Approximation of laws and alignment of practices 

In order to gain the full  benefits  of a large integrated  area, it is important to ensure that a 
certain degree of harmonisation is in place. This will favour the predictability of rules and 
practices,  in  particular  for  suppliers.  Furthermore,  the  application  of  similar  structures 
will facilitate  the exchange of experiences between  administrations. In this regard, it will 
be important to avoid over-regulation  in this particular sector. 

This  process  should  lead  to  the  adoption  of  harmonised  rules  based  on  transparency, 
openness, including  the possibility  of challenging  unlawful  decisions,  along the lines of 
the  international  recognised  models,  such  as  the  WTO  Agreement  on  Government 
Procurement.  In  this  context,  it  is  important  that  all  Mediterranean  partners  effectively 
take  part  in  the  relevant  processes  linked  to  public  procurement  in  the WTO  and  other 
international fora. 

3.1.3  Reciprocal and gradual liberalisation of cross-border exchanges in this field 

The  Euro-Mediterranean  agreements  already  provide  for  reciprocal  and  gradual 
liberalisation  of  exchanges  in  the  field  of  public  procurement.  In  this  context,  national 
treatment is a desirable objective aiming to achieve reciprocal market access.6 

This  reciprocal  and  gradual  liberalisation  of  exchanges  could  be  achieved  in  stages, 
possibly  allowing for  less developed economies  to prepare themselves for competing on 
equal  grounds.  In  this  context,  the  possibility  of  asymmetric  liberalisation  during  a 
predetermined  transitional  period  could  be  explored.  Experiments  of  this  type  have 
already taken place in the context of the EU's associations with some countries of Central 

It  should  be  noted  that  the  EC  and  Israel  have,  within  the  context  of  the  WTO  Agreement  on 
Government  Procurement,  concluded  an Agreement  on  further  liberalisation.  Turkey  has  an  observer 
status in this agreement. 

•13-

and Eastern Europe. This gradual approach takes account of the specific  needs of some of 
the Mediterranean partners to adapt to a more competitive environment. 

3.1.4  Cooperation  and  mutual  assistance  between  the  different  administrations 

concerned 

An  optimal  procurement  policy  demands  a  real  awareness  of  what  procurement  of  the 
highest  commercial  standard  actually  entails.  Exchange  of  information,  data  and 
experiences  between  the  different  administrations  concerned  could  be  useful  for  the 
effective  functioning  of the system.  A further  step forward could be the establishment of 
telematic  links  between  administrations.  For  instance,  some  programmes  in  the 
Community  are  specifically  devoted  to  increasing  transparency  in  public  procurement. 
The Mediterranean partners might be interested in participating in these programmes. 

In addition, steps need to be taken to stimulate the training of procurement officers  in the 
new and evolving skills they need and to help them to better understand the new role they 
are  called  upon  to  play.  The  interests  of  the  Mediterranean  partners  are  focused  on 
effective  purchasing  methods  that  could  help  the  public  sectors  in  these  countries  to 
reduce  public  expenditure,  while  obtaining  best  value  for  money.  Rules  should  be  a 
means  to  the  end  of  competitive  and  efficient  purchasing,  rather  than  an  end  in 
themselves.  If  these  objectives  are  to  be  met,  it  is  essential  to  ensure  that  the  rules 
regulate entities' behaviour without hindering best practice on a day-to-day basis. 

Improving  the  development  of  a  professional  public  administration  could  certainly  to 
improve the functioning  of the system. Public administrations need to be able to carry out 
procurement  procedures, to draft  tender documentation  or information  notices, to assess 
bids and manage contracts. Practice is much more than just applying the rules. 

Improving  management  methods  in public  administration  is, however,  only one  side of 
the coin in  public procurement practice. Active participation  of bidders is also important 
if best practice is to be achieved. Terms of reference can be perfectly  drafted,  however a 
good  tender  should  be  presented.  Hence,  in  order  to  achieve  efficient  purchasing,  the 
quality  of  the  private-sector  response  to  public-administration  action  needs  to  be 
improved. 

3.2 

Establishment of strategy 

The instruments for implementing this work programme are: 

- 

technical and legal assistance; 

- 

training; 

-  extension of Community programmes; 

-  cooperation between administrations. 

The  Commission  will  provide  technical  and  legal  assistance  in  the  field  of  public 
procurement  to other Mediterranean  partners on request.  Such  assistance could  facilitate 
the  approximation  of  legislation  and  practices,  in  particular  with  regard  to  existing 
international standards. 

-14-

Moreover, technical  assistance could be provided  for training and improvement  of public 
administration.  The  development  of  a  programme  to  spread  training  throughout  the 
Euro-Mediterranean  Area  could  be  envisaged;  it  would  need  to  focus  on  best 
procurement  practice. The purpose  of  this  initiative  is to disseminate  to all  levels of the 
public  sector  the  methods  and  mechanisms  which  could  help  achieve  effective 
purchasing, in this sense, it goes beyond mere training on compliance with the rules.  The 
programme would also need to be extended to prospective bidders, so as to improve their 
capacity to respond to the needs of the purchasing entities. 

The  Commission  encourages  the  participation  of  the  Mediterranean  partners  in  its 
programmes  aiming to improve the public procurement  regime in the EC, particularly in 
programmes such as the CPV or SIMAP (information  technology). 

Finally, general  cooperation  and contacts between  administrations  should be established. 
This  should  imply  an  annual  structured  dialogue  at  an  appropriate  level  allowing  all 
countries involved to address issues of common interest, including  liberalisation. 

4- 

Intellectual Property  Rights (IPR) 

A large number of goods and services rely heavily on intellectual  and industrial  property 
protection.  A  meaningful  and  comparable  level  of  intellectual  and  industrial  property 
protection across the entire area is therefore necessary. This would: 

-  promote trade flows  within the Euro-Mediterranean  area and investment  opportunities 

across the area; 

-  favour  the modernisation  and competitiveness of the Mediterranean  partners'  industry 

and enhance cooperation; 

-  reduce piracy and counterfeiting; 

-  promote  cultural  activities,  which,  to  a  high  degree,  depend  upon  effective  IPR 

protection. 

4.1 

Substance of initiatives 

4.1.1  General policy line 

should  be  made 

to  agree  on  a  more  comparable 

Further  efforts 
level  of 
intellectual property protection. Any effort  to achieve greater harmonisation  in this sector 
will  help  significantly  in  achieving  the  final  aim  of  a  free  trade  area.  Therefore  the 
strategy should be to further  develop the existing Association  Agreements  and to aim at 
approximation  of  laws  (with  appropriate exceptions), in the area of intellectual  property 
rights  (EPR). This  would  lead  to  greater  coherence  in  IPR  protection  across  the  entire 
area, which will give rise to real mutual benefits. 

4.1.2  Key problems to tackle 

Apart from  the general objective of achieving an appropriate level of IPR, the area which 
deserves  particular  attention  is counterfeiting  and  piracy,  both  in  the  "copyright"  area ( 
notably  with  respect  to  phonograms,  cassettes,  CDs,  software)  and  in  the  area  of 
Industrial  Property  (such  as counterfeits  of  trade marks, patents).  Another  major  area of 
concern  is  the  non-patentability  of  certain  products  (notably  pharmaceuticals).  These 

-15-

problems  should  be given  special  attention  when  defining  more closely  the  IPR strategy 
within the free trade area. 

4.1.3  Meaningful IPR provisions and enforcement need to be ensured 

The  objective  of  ensuring  meaningful  IPR  provisions  should  be  pursued  through  the 
following: 

-  Without  prejudice  to  rights  and  obligations  under  the  WTO  TRIPs  Agreement,  the 
Mediterranean  .partners  will  provide  for  improved  levels  of  intellectual  property 
protection,  including  the  means  to  enforce  the  rights,  so  as  to  move  towards  closer 
approximation between the 27 partners. The EU will provide all necessary assistance. 

-  As  far  as  accession  to  multilateral  conventions  is  concerned,  the  lists  set  out  in  the 
Association  Agreements  will  serve  as a good  basis  for  closer  approximation.  These 
lists will need to be reviewed and updated as appropriate on a mutually agreed basis. 

-  Given  that  in  certain  fields  the  present  situation  with  regard  to  piracy  and 
counterfeiting  is very serious, the EU, in cooperation  with the Mediterranean partners, 
will have to use all appropriate measures to deal with on-going  infringements. 

4.2 

Establishment of strategy 

In  order  to  attain  the  objectives,  as  is  well-established  practice  in  the  context  of 
Association/Cooperation  agreements,  the  Commission  should  provide  for  sound  and 
efficient  technical assistance and training. This will be done inter alia by means of: 

-  exchange of experts; 

-  seminars; 

-  early mutual information  on relevant legislation; 

- 

training activities for administrative and customs personnel, as well as judges. 

The Commission is ready to provide assistance for institution building where necessary. 

5. 

Financial Services 

5.1 

Substance of initiatives 

The main task is to lay down mutually agreed liberalisation  steps to encourage  increased 
trade  in  financial  services  between  the  EU  and  its  Mediterranean  partners.  However, 
given  the  substantial  differences  in  political  and  economic  development  between  the 
partners,  it  will.,  at  least  in  the  initial  phase,  have  to  be  carried  out  on  a  bilateral  or 
grouped  basis  between  two  or  more  partners  with  similar  levels  of  economic 
development and with roughly equivalent financial  market maturity. 

A  key  factor  for  the  development  of  trade  in  financial  services  is  the  setting-up  of  an 
adequate  regulatory  framework  as  a  necessary  prerequisite  for  mutual  trust  and 
cooperation.  The  objective  will  be  to  strengthen  prudential  regulations  and  supervision 
with  a  view  to establishing  a sound  regulatory  framework.  The  incorporation  of  sound 
financial  services regulation  will  also facilitate  the  gradual  move  to full  capital  account 

-16-

convertibility  in  the  Mediterranean  partners  that  is  embodied  in  the  Association 
Agreements. 

When  drafting  laws  and  regulations  for  the  financial  sector  it  is  important  to  have  the 
actual "know how" level of the industry in mind. Qualified  supervisory bodies mean that 
the  supervisory  staff  must  be  well  trained  but  also  be  sufficient  in  number  to  make  it 
possible  to  supervise  or  control  all  the  authorised  firms  on  a  timely  basis.  Without  a 
correctly functioning  supervisory body, even the most advanced regulations will make no 
sense. Therefore,  every effort  must be made to strengthen  the quality  of  the  supervisory 
bodies so that they are able to perform  their duties adequately. 

5.2 

Establishment strategy 

A precondition  for increased trade flows  in financial  services is the creation  of  sufficient 
supervisory standards in the Euro-Mediterranean  area. 

The EU directives in the financial  services area cannot  serve as an immediate model  for 
cooperation  in  the  Euro-Mediterranean  area.  It  is  important  to  take  account  of  the 
economic environment and history of each Mediterranean  partner. 

Both  politically  and  practically  a  free 
trade  zone  which  does  not  enable  the 
EU's Mediterranean partners to ensure the stability of their financial  system and adequate 
protection for their consumers is likely to be a non-starter. 

It  is  suggested  that  the  cooperation framework  take  as  its  point  of  departure  the 
development  of  already  existing  Association  Agreements  and  the  GATS  Agreement  on 
financial  services for the WTO Members without excluding cooperation  between  smaller 
groupings of two or more partners with similar levels of economic development. 

For that purpose, work must be carried out in three areas: 

-  setting  up  an  adequate  regulatory  framework  for  prudential  supervision  (technical 

assistance programmes can be developed in this respect). 

- 

training  local  supervisory  authorities  in  financial  control,  and  auditing,  including  -
possibly -  modernisation of existing infrastructure  (computers etc.). Training might be 
co-ordinated by the Commission but carried out by representatives  of Member States' 
supervisory authorities with sufficient  hands-on experience. The Commission  is ready 
to provide assistance for institution building where necessary 

- 

increasing  cooperation  between  supervisory  authorities  in  the  EU  and  in  the 
Mediterranean  partners  to  create  the  trust  which  is  the  basis  of  any  exchange  of 
financial  services. 

6. 

Data protection 

The creation  of  the area of  shared  prosperity  will  generate  a huge number of  data  flows 
between  operators based in the Union  and in the twelve Mediterranean  partners, be they 
private companies or public administrations. 

In order to protect  the fundamental rights of individuals, notably their right to privacy, a 
country  might  oppose  the  export  of  personal  data  concerning  its  citizens  to  another 

-17-

country  that  docs  not  have  rules  guaranteeing  sufficient  protection  of  the  rights  of 
individuals. Although  such obstacles to the free  flow  of personal data are allowed within 
the  framework  of  the World  Trade Organisation,  it  is clear  that  they could  compromise 
the aims of Euro-Mediterranean cooperation. 

6.1 

Substance of initiatives 

The key measures in the data protection field will be as follows: 

-  approximation of national legislation; 

-  adoption of the necessary specific measures. 

6.1.1  Approximation of legislation 

By virtue of Directive 95/46/EC the transfer  of personal  data to third countries may only 
take  place  if  the  third  country  in  question  ensures  an  adequate  level  of  protection.  At 
present,  none  of  the  Mediterranean  partners  has  legislation  in  force  that  deals  with  the 
protection  of  personal  data.  Therefore  it  is  important  to  agree  on  measures  that  will 
guarantee 'an  adequate  level  of  protection  in  the  partner  countries, in  order  to  prevent 
possible barriers to the transfer of personal data in the future. 

Even though  the intention  is not to oblige the Mediterranean  partners to comply with all 
the  standards  laid down  in Directive  95/46/EC, the  adoption  of  the necessary  measures 
will  take  some  time.  After  the  adoption  of  the  first  national  legislative  measures,  the 
partner countries might be encouraged  to join  Convention  108 of the Council  of Europe 
for the protection of individuals with regard to automatic processing of personal data. 

6.1.2  Adoption of specific measures necessary to the smooth functioning  of the area 

of shared prosperity 

If  an  adequate  general  level  of  protection  cannot  be  achieved  by  all  partner  countries 
within  a certain  number of  years, it  will  be necessary  to  adopt  specific  measures  on the 
protection  of  personal  data  with  regard  to  certain  areas.  Examples  of  such  areas  are: 
mutual  cooperation  in  customs  matters  between  the  customs  administrations  of  the 
partner countries and the EU, mutual cooperation  on tax or social  security and electronic 
commerce. 

6.2 

Establishment of strategy 

The  instruments  which  will  be  used  to  put  these  initiatives  into  practice  are  technical 
assistance and a dialogue between each of the partners and the Commission. 

6.2.1  Technical assistance 

This  technical  assistance  could  take  various  forms,  depending  on  each  partner's 
requirements: 

-  exchanges of experts from  the national monitoring authorities for data protection; 

-  exchanges of information  on national  legislation; 

-  financial  and technical  assistance for the setting-up of monitoring authorities to ensure 

that legislation is implemented; 

-18-

-  raising  the  awareness  of  administrations,  businesses  and  the general  public  by means 

of various information  programmes on the need to protect personal data; 

-  help in formulating codes in various sectors. 

Technical  assistance  from  the  Member  States'  monitoring  authorities  could  be  required 
throughout the process. (...) 

6.2.2  Bilateral dialogues 

The  issue  of  personal  data  protection  has  not  been  raised  to  date  in  the  Community's 
relations with its Mediterranean partners. 

An initial approach  should consist in identifying,  by means of informal  bilateral contacts, 
each  partner's position  on data protection  and in determining the extent to which they are 
prepared to develop policy in this area. 

At a subsequent  stage, the Commission's  general  mandate, under Directive 95/46/EC, to 
negotiate with countries without adequate levels of protection should be put into  effect. 

7. 

Accounting and auditing 

Harmonisation  of  financial  information  is  an  important  part  of  facilitating  business 
exchanges  in  the  Euro-Mediterranean  area.  In  the  accounting  and  auditing  fields,  a 
similar  approach  to  that  for  the  CEECs  could  be  used  in  respect  of  the  Mediterranean 
partners.  This could include: 

-  assistance and cooperation in drafting new accounting and auditing regulations; 

- 

training programmes for accountants and auditors; and 

- 

the organisation of workshops or discussion seminars. 

An  active  approach  requires  not  only  that  the  appropriate  funding  is  provided,  but  also 
that  the Mediterranean  partners  give  active  cooperation  and  support.  Funds  provided by 
the EU should  - like the PHARE and TACIS funds  - be used on  an  "on  demand" basis. 
Projects  should be put forward  by the Mediterranean  partners themselves  to ensure their 
full  participation  and  commitment.  There  should  be  no  attempt  to  "impose"  European 
solutions. 

The suggested  approach  must also take into account that there are very large  differences 
in accounting and auditing traditions between the Mediterranean partners. 

8. 

Competition rules 

Provisions concerning competition rules are set out in agreements with the Mediterranean 
partners.  They include a commitment by the partners to bring their competition rules into 
line  with  those  of  the  Union.  The  role  of  the competition  rules  in  the  functioning  of a 
free  trade  area  and  in  the creation  of  an  area  of  shared  prosperity  is  fundamental:  they 
help to ensure a climate of transparency and legal certainty for business  and to make the 
local economy more competitive. 

•19-

8.1 

Substance of initiatives 

8.1.1  Approximation 

of 

competition 

rules  between 

the  partners 

and 

approximation  with  Community  competition  rules 

In the course  of  the  negotiations,  the  partners entered  into commitments  concerning  the 
approximation  of competition  rules.  If these commitments are to be fulfilled  in practice, 
action will have to be taken to set up or adapt competition  arrangements so as to facilitate 
alignment of practice and to ensure that arrangements function  effectively. 

8.1.2  Setting-up  or  reinforcement  of  administrative  resources  for  the  authorities 

responsible for  implementing competition  rules 

It is important to set up or reinforce  authorities responsible for ensuring compliance with 
competition  rules  and  to  provide  them  with  the  appropriate  administrative  resources. 
Action  is necessary in this area and could be based on the operating experience  acquired 
by national competition authorities in the European Union. 

8.1.3  Liberalisation of sectors of the economy 

Free trade in goods and services would not be comprehensive if a large number of sectors 
were excluded from  market rules.  It is in the partners'interest to ensure that competition 
rules apply to the greatest possible number of sectors of the economy. 

8.2 

Establishing a strategy 

The  instruments  whereby  this  action  programme  will  be  put  into  practice  are  technical 
assistance and cooperation with competition authorities. 

8.2.1  Technical  assistance 

Technical  assistance  in  the  form  of  seminars  and  conferences  organised  within  the 
framework  of  the  Euro-Mediterranean  partnership  can  improve  the  training  of  officials 
and competition  experts, both  individually  and collectively.  Such  assistance  should  also 
comprise  a  legal  advisory  service  to  help  our  partners  adapt  their  existing  competition 
rules. 

8.2.2  Cooperation  through  dialogue between competition  authorities 

Dialogue between the competition  authorities  of the Mediterranean  partners and those of 
the  European  Union  could  be  encouraged  as  a  means  of  helping  our  partners  with  the 
requisite  legal  and  institutional  reforms.  Bilateral  dialogue  could  still  take  place  in 
specific fields where required. 

VIII.  IMPLEMENTATION 
PARTNERSHIP 

OF 

THE 

EURO-MEDITERRANEAN 

The  Commission  is responsible  for  implementing  and  following  up  the partnership  and 
has already adopted a number of proposals to that effect  which are complemented by this 
It  will  also  be  able  to  cooperate  with  international  agencies  or 
Communication. 

-20-

institutions  already  involved  in  providing  technical  assistance  to  the  region  (such  as the 
World Bank and the International  Monetary Fund). 

The Commission  will  be backed up by working groups which either already exist or will 
be  set  up  as  required.  These  working  groups,  comprising  representatives  of  the  27 
partners, will enable the identification  of projects common to the largest possible number 
of  Mediterranean  partners.  The  members  will  be experts  from  the  relevant  branches of 
industry, representing each of the interested parties. 

The  Commission,  assisted  by  the  experts,  will  specify  the  number  of  working  groups 
required  and their internal  organisation.  It will also determine  appropriate  and coherent 
operating arrangements for the working groups and the tasks to be vested in them. 

The  working  groups  are  to  be  funded  by  the  Commission  in  accordance  with  its 
budgetary legislation and in compliance with MEDA procedures. 

The  main  task  of  the  working  groups  will  be  to  pursue  the  activities  identified  in  the 
action  programme,  to  identify  priorities  and  to  ensure  follow-up.  In  practice  this  will 
mean: 

(a) 

Pursuing the activities identified  in this Communication 

With  a view  to pursuing  the activities  for  which  it  was set  up, each  working  group will 
have to develop its own position on the following points: 

- 

the areas to be covered, with a view to identifying common fields of activity; 

-  analysis of regional  and interregional  activities and the link with  activities carried out 

on a bilateral basis; 

- 

the  structures  in  the  Member States  and  the  Mediterranean  partners  which  can 
facilitate  the  Euro-Mediterranean  partnership.  A  list  of  bodies  likely  to  make  a 
positive contribution will be drawn up for that purpose. 

(b) 

Fixing priorities 

The  working  groups  will  have  to  decide  what  objectives  and  priorities  to  pursue.  In 
particular,  they  will  help  to  shape  the  links  between  multilateral  awareness-raising  and 
exchanges of experience on the one hand  and bilateral  training, technical  assistance and 
advisory activities on the other: 

-  priorities  concerning  the  regional  or  interregional  character  of  activities,  both  in  the 
light  of  the  requirements  of  individual  countries  and  those  which  are  common  to 
several countries, and the links with bilateral activities; 

-  priorities  concerning  the  structure  and  economic  situation  of  the  specific  product 

sectors. 

In  addition,  the  working  groups  will  have  to  decide  whether  to  give  priority  to 
multi-regional activities which are linked to projects or action programmes effected  under 
bilateral agreements. 

-21 

,(c) 

Helping  the  Commission  to  identify  common  projects,  including  technical 
assistance  projects 

The working groups will  provide the Commission  will* a fn«raework  for  determining the 
rwjJtilaferal  and bilateral  activities to be carried out ow the various topics indicated in this 

(d) 

Establishing ongoing follow-up for activities 

The working groups will establish appropriate arrangements for following  up the selected 
activities.  This  follow-up  should  be  sufficiently  detailed  to  allow  the  Commission  to 
effectively  monitor implementation  of the action programme. 

IX. CONCLUSION 

The  initiative  set  out  above  will  enable  the  European  Union  and  its  Mediterranean 
Partners to further  the spirit of partnership and solidarity as agreed upon in the Barcelona 
Declaration  without  calling into question  the balanced  progression  of  the Partnership  or 
the objectives  set out in the Association  Agreements which have already been concluded 
or are being negotiated. 

Increased coordination  in  a number of  areas falling  within  the Single Market  will  be an 
important  step towards meeting the objective  of economic and financial  partnership, that 
is the creation  of  an  area  of  shared  prosperity. The experience  of  creating the European 
Single  Market  can  be drawn  on  in  achieving  this  objective.  The  Commission  proposes 
that  both  the areas of  cooperation  and the appropriate  actions  be agreed  on  a joint  basis 
by the partners. 

At  this  stage  we  suggest  focusing  on  the  fields  of  customs  and  taxation,  public 
procurement,  intellectual  property  rights,  financial  services,  data  protection,  free 
movement  of  goods,  accounting  and  auditing.  The  actions  proposed  cover  inter alia 
technical  assistance,  training,  administrative  co-operation,  approximation  of  laws  and 
alignment of  practices. 

The actions undertaken  will comply fully  with multilateral  obligations and will be in line 
with  the objectives  and the procedures  of  the MEDA programme. They  will  not  require 
extra  funding  but  will  be  financed  entirely  by  the  funds  allocated  to  the  MEDA 
programme. 

-22-

Annex  I 

Progress  of  negotiations  on  Euro-Mediterranean 
Association  Agreements * 

CONCLUSION 
OF 
NEGOTIATIONS 
June 1995 

SIGNATURE 
OF 
AGREEMENT 

ENTRY 
INTO 
FORGE 

July 1995 

March  1998 

PARTNER 

Tunisia 

Israel 

September  1995 

November 1995 

Morocco 

November  1995 

February  1996 

~ 

~ 

PLO for the  benefit 
of the Palestinian 
Authority 
Jordan 

Egypt 

Lebanon 

Algeria 

Syria 

December  1996 

February  1997 

July 1997 

April  1997 

November  1997 

Negotiations in 
progress 
Negotiations in 
progress 
Negotiations in 
Progress 
Negotiations 
progress 

in 

~ 

~ 

~ 

~ 

~ 

— 

— 

~ 

— 

*  Relations  with  Turkey,  Cyprus  and  Malta  are  governed  by  pre-existing  Association 
Agreements  providing  notably  for  the  gradual  establishment  of  customs  unions.  The  customs 
union with Turkey entered  into force on 31.12.1995; the customs union with Cyprus entered  into 
force on 01.01.1998. 

Source:  European Commission, DG I.B 

July 1998 

-23-

% 
100 

13 
2 
2 
81 

% 
100 

1 
9 
85 
5 

1.609 

206 
27 
26 
1.304 

1.573 

9 
143 
1.339 
78 

36 

102 
2.266 
19 
2 
1.671 

Year:  1994 
ECU millions 
Source: SOfcC 

Annex II 

TRADE BETWEEN THE EU AND THE MEDITERRANEAN COUNTRIES 

ALGERIA 

MOROCCO 

TUNISIA 

EGYPT 

JORDAN 

LEBANON 

SYRIA 

7. Exports 
of  which: 
a.  Foodstuffs 
b. Raw  materials 
c. Energy  prod. 
d. Manufact.  prod. 

2. Imports 
of which: 
a.  Foodstuffs 
b. Raw  materials 
c.  Energy  prod. 
d. Manufact.  prod. 

% 
100 

24 
2 
1 
73 

% 
100 

0 
1 
81 
4 

4.615 

1.092 
103 
37 
3.353 

5.851 

22 
33 
4.725 
207 

% 
100 

6 
4 
2 
86 

% 
100 

22 
9 
1 
68 

4.375 

264 
196 
92 
3.774 

3.707 

800 
330 
54 
2.511 

% 
100 

6 
4 
4 
86 

% 
100 

12 
1 
8 
78 

4.563 

635 
124 
31 
3.662 

2.796 

100 
204 
1.575 
903 

3.770 

213 
135 
155 
3.232 

3.038 

360 
43 
255 
2.370 

% 
100 

1.037 

% 
100 

14 
3 
1 
80 

% 
100 

4 
7 
56 
32 

171 
26 
2 
783 

16 
3 
0 
76 

% 
100 

4 
17 
0 
39 

151 

6 
25 
0 
59 

% 
100 

14 
3 
10 
71 

% 
100 

7 
31 
3 
55 

2.194 

304 
72 
217 
1.562 

90 

6 
28 
3 
50 

3.  Balance 

-1.236 

668 

733 

1.767 

886 

2.104 

4. Cover rate 

(as%) 

1/2 
la/2a 
lb/2b 
lc/2c 
ld/2d 

1. Exports 
of which: 
a.  Foodstuffs 
b. Raw  materials 
c.  Energy  prod. 
d. Manufact.  prod. 

2.  Imports 
of  which: 
a.  Foodstuffs 
b.  Raw  materials 
c.  Energy  prod. 
d. Manufact.  prod. 

3.  Balance 

4. Cover rate 

(as%) 

1/2 
la/2a 
lb/2b 
lc/2c 
l d / 2d 

79 
4.864 
309 
1 
1.619 

118 
33 
60 
172 
150 

124 
59 
318 
61 
136 

163 
636 
61 
2 
405 

685 
3.068 
102 
.. 
1.331 

2.441 
4.881 
256 
7.466 
3.136 

ISRAEL 

TURKEY 

CYPRUS 

MALTA 

TOTAL MED. 

OUTSIDE EU 

% 
100 

5 
3 
0 
90 

% 
100 

10 
8 
3 
77 

% 
100 

2 
8 
2 
82 

% 
100 

19 
5 
2 
73 

8.868 

205 
750 
151 
7.284 

7.605 

1.451 
399 
165 
5.531 

1.994 

166 
34 
91 
1.657 

620 

116 
14 
0 
488 

1.263 

1.375 

% 
100 

8 
2 
5 
83 

1.865 

136 
30 
220 
1.447 

% 
100 

7 
2 
12 
78 

% 
100 

1.012 

% 
100 

19 
2 
0 
79 

1 
1 
6 
90 

6 
8 
62 
910 

853 

43.846 

3.816 
1.747 
1.057 
36.079 

30.596 

3.300 
1.540 
8.289 
16.287 

% 
100 

538.700 

% 
100 

9 
4 
2 
82 

40.529 
16.494 
13.773 
458.225 

% 
100 

539.713 

11 
5 
27 
53 

48.637 
46.358 
62.736 
365.975 

% 
100 

9 
9 
12 
68 

13.2491 

-1.013 

117 
14 
188 
91 
132 

322 
143 
245 
239.279 
340 

184 
2.383 
390 
358 
159 

143 
116 
113 
13 
222 

100 
83 
36 
22 
125 

8.955 

425 
250 
35 
8.020 

4.153 

424 
313 
112 
3.180 

4.801 

216 
100 
80 
31 
252 

Year 1995 
ECU '000 

IMPORTS TO THE EU 

COUNTRY 

Algeria 
Morocco 
Tunisia 

Egypt 
Jordan 
Lebanon 
Syria 
Israel 
Gaza +  Jericho 
Turkey 
Cyprus 
Malta 

TRADE BETWEEN THE EUROPEAN UNION (EU 15) AND ITS MEDITERRANEAN  PARTNERS 

TOTAL 

Agricultural  products 

Raw  materials 

Mineral  fuels 

Manufactured  goods 

Other  unclassified  products 

6.009.565 
4.013.895 
3.360.205 
2.327.236 
134.147 
110.465 
1.733.588 
4.652.353 
341 
9.242.801 
737.101 
1.077.000 

26.432 
832.306 
359.394 
191.980 
8.357 
8.408 
24.148 
447.194 
291 
1.488.251 
159.273 
7.505 

49.758 
325.710 
61.092 
199.396 
34.388 
27.754 
167.774 
319.237 
2 
486.899 
14.454 
9.287 

4.525.513 
39.211 
235.040 
1.176.643 
0 
3.990 
1.432.151 
38.208 
0 
128.412 
5.524 
58.447 

231.660 
2.801.606 
2.693.440 
744.178 
79.896 
66.555 
106.724 
3.702.140 
48 
7.096.999 
555.911 
962.642 

1.176.201 
15.062 
11.241 
15.041 
11.506 
3.757 
2.792 
145.590 
0 
42.241 
1.939 
39.119 

1.464.489 

TOTAL 

33.398.698 

3.553.538 

1.695.750 

7.643.139 

19.041.800 

EXPORTS FROM THE EU 

COUNTRY 

TOTAL 

Agricultural  products 

Raw  materials 

Mineral  fuels 

Manufactured  goods 

Other  unclassified  products 

Algeria 
Morocco 
Tunisia 

Egypt 
Jordan 
Lebanon 
Syria 
Israel 
Gaza + Jericho 
Turkey 
Cyprus 
Malta 

4.709.413 
4.734.466 
4.162.448 
5.019.979 
1.045.502 
2.469.375 
1.376.765 
9.658.244 
5.000 
13.440.516 
2.014.117 
2.015.300 

913.383 
485.368 
322.071 
594.562 
167.849 
343.357 
186.141 
431.128 
1.045 
615.116 
182.471 
152.121 

188.445 
250.845 
184.777 
355.876 
32.788 
83.366 
40.729 
372.919 
146 
1.064.910 
41.143 
25.470 

49.684 
78.480 
132.410 
31.127 
6.039 
187.482 
33.364 
41.844 
18 
119.228 
66.438 
313.134 

3.532.233 
3.884.497 
3.487.144 
3.928.832 
805.819 
1.837.036 
1.100.476 
8.629.724 
3.717 
10.874.430 
1.667.631 
1.472.801 

25.802 
35.303 
36.096 
109.587 
33.008 
18.319 
16.057 
182.650 
74 
766.940 
56.467 
51.845 

TOTAL 

50.651.123 

4.394.614 

2.641412 

1.059.250 

41.224.338 

1.332.1481 

TRADE BETWEEN THE EUROPEAN UNION (EU 15) AND ITS MEDITERRANEAN  PARTNERS 

Year: 1996 
ECU '000 

IMPORTS TO THE EU 

COUNTRY 

TOTAL 

A g r i c u l t u r al  p r o d u c ts 

Mineral  fuels 

Manufactured  goods 

Raw  materials  and  other  unclassified  prod. 

Algeria 
Morocco 
Tunisia 

Egypt 
Jordan 
Lebanon 
Syria 
Israel 
Gaza  +  Jericho 
Turkey 
Cyprus 
Maita 

5.443.606 
4.222.953 
3.628.445 
2.773.974 
171.029 
122.390 
1.957.113 
5.278.501 
861 
10.165.391 
563.181 
796.472 

37.604 
957.278 
247.382 
159.033 
8.622 
11.689 
27.517 
528.867 
722 
1.544.097 
157.022 
10.854 

5.158.385 
28.520 
365.610 
1.716.952 
0 
0 
1.685.171 
32.704 
0 
121.821 
5.391 
55.095 

195.662 
2.878.865 
2.942.774 
695.165 
94.800 
83.079 
117.550 
4.229.693 
133 
7.926.459 
379.213 
692.901 

TOTAL 

35.123.915 

3.690.686 

9.169.649 

20.236.294 

EXPORTS FROM THE EU 

51.955 
358.290 
72.680 
202.823 
67.607 
27.622 
126.875 
487.237 
6 
573.014 
21.555 
37.622 

2.027.286 

COUNTRY 

TOTAL 

Agricultural  products 

Mineral  fuels 

Manufactured  goods 

Raw  materials  and  other  unclassified  prod. 

Algeria 
Morocco 
Tunisia 

Egypt 
Jordan 
Lebanon 
Syria 
Israel 
Gaza  +  Jericho 
Turkey 
Cyprus 
Malta 

4.024.697 
4.678.393 
4.323.521 
5.725.871 
1.176.606 
2.709.541 
1.395.528 
10.387.796 
38.167 
18.195.625 
1.846.481 
1.864.882 

787.184 
326.711 
171.017 
560.380 
121.584 
327.567 
148.492 
436.480 
6.168 
602.467 
208.376 
147.839 

30.604 
105.920 
160.168 
67.801 
4.588 
233.833 
40.385 
62.709 
1 
225.667 
74.685 
307.339 

3.020.543 
3.953.245 
3.763.952 
4.507.396 
979.992 
2.042.543 
1.127.096 
9.279.257 
31.790 
15.362.120 
1.430.715 
1.350.751 

TOTAL 

56.367.109 

3.844.263 

1.313.700 

46.849.402 

186.366 
292.517 
228.383 
590.295 
70.442 
105.597 
79.555 
609.350 
208 
2.005.371 
132.706 
58.952 

4.359.744 

THE EUROPEAN UNION'S SHARE (EU 15) 
OF THE MEDITERRANEAN COUNTRIES' EXTERNAL TRADE 

Imports (%) 

Algeria 
Morocco 
Tunisia 
Egypt 
Jordan 
Lebanon 
Syria 
Israel 
Palestinian Terr. 
Cyprus 
Malta t 
Turkey 

Exports (%) 

Algeria 
Morocco 
Tunisia 
Egypt 
Jordan 
Lebanon 
Syria 
Israel 
Palestinian Terr. 
Cyprus 
Malta 2 
Turkey 

1991 
65.0 
55.8 
74.0 
42.7 
32.3 

42.0 
50.4 

50.1 
75.5 
47.0 

1991 

62.4 
76.9 
43.1 
3.2 

49.0 
39.3 

45.1 
77.7 
54.1 

1992 
66.5 
53.9 
73.2 
41.1 
31.6 

40.0 
53.0 

50.5 
76.7 
46.6 

1992 
73.4 
64.0 
78.2 
39.7 
3.0 

63.0 
37.5 

43.1 
75.3 
53.9 

1993 
61.5 
54.5 
74.7 
45.4 
33.2 

40.0 
52.2 

54.3 
71.6 
47.1 

1993 
68.8 
62.4 
78.6 
40.1 
4.1 

61.0 
32.2 

38.7 
71.7 
49.5 

1994 
59.8 
56.5 
71.9 
40.0 
35.5 
50.4 
36.0 
54.4 

52.7 
75.7 
46.9 

1994 
69.9 
64.4 
80.0 
43.9 
5.2 
15.0 
56.0 
30.9 

36.8 
73.8 
47.7 

1995 
59.3 
56.1 
71.4 
38.9 
33.2 
53.4 
"34.0 
52.9 
6.31 
51.7 
72.7 
47.2 

1995 
64.9 
62.1 
79.0 
45.8 
6.3 
15.8 
57.0 
34.4 
0.7, 
34.7 
71.4 
51.2 

1996 
62.5 
54.1 
72.3 
36.2 
31.7 
49.9 
33.0 
52.3 

48.6 
68.6 
52.6 

1996 
58.7 
61.4 
80.0 
46.2 
8.3 
16.2 
62.0 
34.3 

28.4 
56.9 
49.7 

1  Data concern direct transactions and do not include transactions effected via Israel. 
2  EU  12. 

Source: Eurostat - Euro-Mediterranean bulletin on short-term indicators 1/98. 

MEDITERRANEAN COUNTRIES' SHARE 
OF THE EUROPEAN UNION'S EXTERNAL TRADE 

Imports  (%) 

EU-15 
B/L 
DK 
D 
EL 
E 
F 
IRL 
I 
NL 
A 
P 
FIN 
S 
UK 

Exports  (%) 

EU-15 
B/L 
DK 
D 
EL 
E 
F 
IRL 
I 
NL 
A 
P 
FIN 
S 
UK 

1991 
6.1 
6.3 
2.2 
5.5 
6.8 
7.3 
9.7 
1.9 
10.6 
4.7  * 
5.3 
8.9 
1.2 
1.7 
2.9 

1991 
9.2 
15.4 
4.3 
7.1 
27.4 
11.7 
13.1 
4.7 
13.8 
8.4 
5.2 
6.7 
5.3 
4.7 
5.8 

1992 
6.3 
6.3 
2.2 
5.9 
9.2 
7.8 
10.2 
2.2 
10.4 
4.6 
4.4 
8.6 
1.3 
2.2 
3.0 

1992 
9.3 
16.2 
4.7 
7.2 
30.4 
12.1 
13.0 
4.2 
14.1 
7.8 
5.4 
6.2 
5.1 
4.6 
5.6 

1993 
6.1 
5.5 
2.3 
6.1 
12.0 
8.0 
9.1 
1.3 
9.8 
5.0 
4.5 
9.2 
1.1 
1.6 
3.2 

1993 
9.6 
15.1 
4.7 
7.5 
25.5 
13.1 
13.0 
4.7 
14.1 
8.7 
5.0 
8.8 
5.2 
5.5 
6.3 

1994 
6.1 
7.4 
2.5 
5.6 
13.2 
8.5 
9.3 
1.5 
10.2 
4.4 
4.5 
8.4 
1.3 
1.6 
3.1 

1994 
8.7 
14.2 
4.4 
6.5 
27.9 
12.2 
12.3 
5.5 
12.8 
7.7 
4.7 
10.0 
3.8 
3.4 
5.7 

1995 
6.0 
7.0 
2.1 
5.5 
11.3 
8.3 
10.3 
1.6" 
8.0 
4.4 
3.7 
6.5 
1.0 
1.6 
3.3 

1995 
8.8 
13.9 
4.5 
6.7 
26.7 
13.1 
12.8 
5.2 
12.3 
8.3 
4.1 
9.6 
4.2 
4.0 
6.2 

1996 
6.1 
7.6 
1.8 
5.6 
12.8 
8.8 
10.2 
1.8 
8.5 
4.3 
4.7 
6.9 
1.1 
1.5 
3.5 

1996 
9.1 
14.8 
4.0 
7.0 
26.8 
12.4 
13.1 
4.5 
12.2 
8.8 
4.4 
8.7 
3.8 
4.5 
6.4 

Source:  Eurostat -  Euro-Mediterranean bulletin on short-term indicators  1/98. 

ISSN 0254-1475 

COM(98) 538  final 

DOCUMENTS 

EN 

11  10  02  09 

Catalogue number  :  CB-C0-98-551-EN-C 

ISBN 92-78-39464-5 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg