Book Launch: Arab Spring and Economic Integration

About twenty economists members of Femise, and representatives of international institutions (AFD, OECD, World Bank, EIB …) met on Friday, June 7th, 2013 in Paris to exchange around the recent collective volume published by Femise and CEPR, entitled “The Arab Spring: Implications for Economic Integration.”

Has the doxa of unlimited free trade, as the supposed best road to growth and welfare for populations, lost its appeal lately? The speeches of many stakeholders seem to suggest that this is the case, as they were expressed during the recent meeting on Friday, June 7th 2013 in Paris organized by Femise (Euro-Mediterranean Forum of Economic Sciences Institutes) and CEPR (Center for Economic and Policy Research ) on the edited volume “The Arab Spring: Implications for Economics Integration.”

The mood is also set from the opening statement of Michael Gasiorek, lecturer in economics at the University of Sussex (UK), member of Femise, co-author and coordinator of the book: he emphasizes that before moving towards the liberalization of trade, a country should first upgrade.

And this can be very painful for the rulers in place because liberalization can lead to loss of sovereignty. Or, as expressed more bluntly by Ahmed Galal, President of Femise: by opening their economic system to free trade, “the rulers can not keep supporting their friends so easily.” In one sentence, it is the entire economic system of friends and rascals, nepotism, opacity, theft and rents that is condemned.

Bernard Hoekam, professor at the European University Institute in Florence, said for his part that “all these countries [of the Arab Spring] are underperforming. And if intra-Maghreb trade is far insufficient, its cost is three times higher than in southern Europe. ”

However, as reported by Patricia Augier, co-author of the book and Deputy Director of the Scientific Committee of Femise,  NTMs (non-tariff measures) in the MENA countries “are well below those of the European Union.” Consequently, not only is the “European Fortress” defending access to its markets, causing an asymmetrical competition, but it also forces the South to endure additional costs to ensure compliance of their exports with European standards. For example, this additional cost is estimated at 60% for flip-flops.

Who wins and who losses ?

The unanimous opinion, a result of Euro-Mediterranean cooperation, eighteen years after the launch of the Barcelona Process, is definitely not a bright one.

Professor Jean-Louis Reiffers, President of the Scientific Committee of FEMISE and the Institute of the Mediterranean (Marseille), with his usual frankness, states with emphasis : “Given the state of the South, the immediate future is not for free trade. Let me be clear: I remain attached to its necessity, but if we advocate for more free trade nowadays, we will be considered as pranksters … especially since, as you know, Europe achieves its largest trade surplus in the Mediterranean south. In our future recommendations, we must always think about who will be the losers and the winners! And act like a doctor who anticipates an epidemic arriving. ”

In short, the Arab springs will also have shaken some old certainties of the economists. Hopefully their questioning will prove beneficial for the future of Euro-Mediterranean cooperation.

Article by Alfred Mignot, Econostrum, June 12, 2013