OVERVIEW

In 1995, policymakers from around the region met in Barcelona to issue a key communiqué, the Barcelona Declaration. Since then, integration was pursued primarily in the form of trade agreements, with the signing of Association Agreements (AAs) with the four Southern and Eastern Mediterranean Countries (SEMCs) studied in this report (Egypt, Jordan, Morocco and Tunisia) but also with Algeria, Israel and Lebanon.

But what was the impact on jobs? It seems the results are underwhelming. SEMCs, as other countries of the Middle East and North Africa (MENA) region, still struggle to attract FDI, lag behind peers in terms of non-oil international trade flows, and, most importantly, face persistent unemployment, informality and low female labor force participation. Hence the question the report tries to address: Why did the reduction in tariffs not bring about changes in key labor market outcomes?

With this in mind, the report is structured as follows.

• The first chapter is about understanding the nature of trade agreements and trade reforms, and the associated expectations in terms of results.
• The second chapter is about understanding why the expected results did not fully manifest themselves in the four SEMCs and what factors affecting trade could have undermined the effects of trade liberalization.
• The third chapter discusses new trends and the challenges and opportunities they bring, together with the need to review trade agreements in order to promote growth and job creation.
• The fourth chapter focuses on recommendations. Specific attention is given to the need to upgrade the region’s “absorption capacity”, improve labour market conditions, and rethink regional cooperation on trade, investment and jobs, especially given current trends and new realities worldwide.

This report was produced by the CMI with contributions from ITC, ERF and FEMISE.

Please cite as follows: Moreno-Dodson, Blanca; Augier, Patricia; Tsakas, Constantin; Louis, Maryse; Hachem-Naas, Lilia; Ben Romdhane, Saoussen; Zaki, Chahir; ElSayed, Neamatallah; Foda, Alia. 2022. “Trade Liberalization and Jobs in the Mediterranean: Towards a New Generation of Trade Agreements”, Center for Mediterranean Integration (CMI-UNOPS), November.