20 MARCH 2002

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The EU - the Mediterranean’s largest trading partner

According to statistics released by Eurostat yesterday, over 2000 the Mediterranean Partner Countries (MPC) conducted nearly half of their total trade (imports + exports) with the EU. The United States, with 14.1 per cent of total MPC trade, ranked second behind the EU as a trading partner. In 2001, the EU conducted 7.1 per cent of its total extra-EU trade with the MPCs.

Of the countries in the group, it was the Maghreb countries (Algeria, Morocco, and Tunisia) which trade most with the EU. In 2000 trade with the EU accounted for 61.2 per cent, 64.5 per cent and 75.0 per cent of these countries' total trade respectively. Jordan and the Palestinian Authority are the two MPCs which trade least with the EU. In 1999 only 0.4 per cent of Palestinian exports went to the EU (15.4 per cent for imports). In the case of Jordan, the figures were 3.3 per cent for exports and 33.0 per cent for imports in 2000. In the same year, Egypt and Israel conducted about 36 per cent of their trade with the EU. Lastly, the EU accounted for 44 per cent of Lebanese trade and about half of the total trade of each of the other MPC members (Cyprus, Malta, Syria and Turkey).

EU imports grew twice as fast as exports

Between 1995 and 2001 EU imports from the MPC grew by 110 per cent (compared with +87 per cent for total extra-EU imports). Strong growth in imports was recorded not only for energy products (+120 per cent), but also for non-energy goods (+105 per cent). EU exports to the MPC, on the other hand, rose by 49 per cent (compared with +70 per cent for total extra-EU exports).

Turkey, Israel and Algeria were the three most important MPC trading partners for the EU in 2001. Together, they accounted for more than 60 per cent of total EU-MPC trade. Among the Member States, Germany, France and Italy are traditionally the main partners for the MPC. They accounted for 60 per cent of total EU-MPC trade in 2001.

MPC trade with the EU is dominated by three groups of products: energy (oil, gas), manufactured goods (leather, yarn, textiles, clothing, footwear, furniture) and machinery and transport equipment. In 2000 trade in these three groups accounted for more than three-quarters of total trade. The EU's biggest trade surplus was for machinery and transport equipment (+27.9 billion euro), while the EU was in deficit for manufactured goods (-6.9 billion) and energy (-14.4 billion).

Growth in trade in services and FDI between EU and MPC
Since 1993, the EU current account balance with the MPC (excluding Cyprus, Malta and Israel) has been in surplus. While trade in goods has always showed a surplus, trade in services has traditionally been in deficit. Between 1995 and 2000 EU trade in services with the MPC grew by just over 60 per cent, compared with 74 per cent for total extra-EU trade in services.

Since 1992 the services balance has been characterised by a deficit in Transportation services and in Travel services (due to EU tourism in the MPC), while Other services (Communication services, Construction services, Computer and Information services, Financial services) were in surplus.

The evolution of EU FDI (Foreign Direct Investment) during the 1990s shows an increasing importance of the Mediterranean region for EU investors. EU assets in the MPC (excluding Cyprus and Malta) rose by an average annual rate of 19 per cent between 1994 and 1999, reaching 14 bn euro at the end of the period. Over the same period total EU assets held in other countries grew on average by 22 per cent per year. The major increase in EU FDI in the MPC began in 1998 and - pushed by sizeable investments in Turkey and Egypt - reached record levels in 2000.

Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | e-mail: editorial@networkpublications.com.mt