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'Made in Agadir Zone': An ambitious vision of the future'.

AMMAN "Made in Agadir Zone", is this a dream, or just an ambitious target for the future of the Agadir trade agreement, the pact designed to build a Euro-Med free trade area (FTA)?

"We would like one day to see products made in Agadir Zone, using accumulation of origin rules from industries in the four member states Jordan, Egypt, Tunisia and Morocco," says Waleed El-Nozahy, executive president of the Agadir Technical Unit.

Some seven years after the Agreement was signed, a group

of experts in the Agadir secretariat in Amman keep working to realize this dream, despite mounting obstacles.

The Agadir Agreement between the four southern Mediterranean nations was signed in Rabat, Morocco on Feb.

25, 2004.

It aims at establishing a regional free trade area between Jordan, Egypt, Tunisia and Morocco, covering 115 million people. It also aims at promoting economic integration within this area, and with the European market.

Finally, the creation of a FTA area is supposed to enhance investment in the Agadir partner countries by eliminating barriers to trade and by facilitating investment; the overall objective of the agreement is to boost economic activity, to support employment, and to improve living standards.

Many technical issues are to be tackled by the four signatory countries with the EU's financial and technical support.

The European Commission has contributed AC8 million since the beginning of the process,investing in a Technical Unit that works on practical aspects: Legislative approximation, custom regulations, rules of origin, etc.

Three sectors were identified to kick start inter-Arab Med trade exchange: Textile, leather and automotive technology.

Figures show a promising future.

Since the agreement's inception, intra-Agadir trade exchange has registered a 45% increase.

In Jordan, exchange with Agadir signatories jumped by 70% between 2007 and 2009.

During the same period, Egypt saw a 160% increase in trade with member states, while Morocco witnessed a 30% rise.

Despite the promising figures, experts and businessmen believe the agreement lags behind, as member states face an uphill battle to overcome political, legislative and logistical obstacles.

The four countries share no common borders, have outdated clearance and standardization legislation and suffer from high cost of transportation.

Such obstacles, they say, can stop the Agadir dream from becoming a reality.

Better focus on bilateral trade rather than aiming directly at the EU market,

EU officials in Amman insist that the accord is on the right track, despite the challenges.

"Total trade among these countries is 4% of their total trade worldwide.

This is very little, but it shows a tendency and trend for growth," says Bertrand Jolas, EC Trade and Transport Attache and liaison officer for Agadir.

He calls on members to focus attentions on bilateral trade rather than aiming for the EU market straight away.

"By getting together, these countries can eventually be better off to produce for the EU market.

But this is still a long way off, as these countries have a lot of barriers between themselves," he adds.

Some Jordanian businessmen agree with this vision.

They say that a weak intra-Arab trade is not due to a lack in agreements, pointing to a 17-member Arab league FTA that has yet to be realized in full.

They are aiming at an integrated Arab market that emulates the EU experience.

"The Agadir agreement is better than the pan Arab agreement," says trader and exporter Talal Ghazawee.

"It is easier to establish business between two countries, to get the networking going," he says.

Businessmen also face tough obstacles abroad, saying that their exports to the EU have dropped, due to stricter rules of origin regulations.

At the CJC garment factory in Jordan's bustling Sahab industrial zone, Managing Director Sameer Maqdah says realizing the full potential of Agadir requires a reassessment of strict EU import regulations.

"Prior to 1999, nearly one third of my production went to Europe, but with rules of origin and other problems, I am finding it more difficult to export to Europe," he says.

"I do not know why we should build a business model on an agreement, rather than an agreement that addresses the business model that exists," he says.

Still, for countries such as Jordan, which suffers 14% unemployment and high poverty rates, the Agadir agreement could be the prescription for economic growth.

Fathallah Emrani, president of the Jordanian Textile Workers Union, says the agreement could be the answer to Jordan's unemployment, as the textile industry is labor intensive.

"It is important to exchange goods among Arab countries.

This opens a new horizon, but this issue has not yet been treated seriously by putting political sensitivities aside," he remarks.

Emrani calls for an Arab League strategy to boost trade and remove regional trade obstacles, arguing that the Agadir pact cannot succeed with four countries alone.

Although the road to a common market is a long and winding one, experts say that as Agadir success stories take shape, more countries will look regionally in order to better compete on the global market. "If we manage to have Syria, Lebanon, Palestine and Algeria on board, Agadir will be the agreement we have all been waiting for," concluded Imrani

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Publication:The Star (Amman, Jordan)
Geographic Code:7EGYP
Date:Feb 28, 2011
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