Arab Mediterranean Free Trade Agreement - Agadir

Summary

The Arab Mediterranean Free Trade Agreement was initiated in Agadir in May 2001 by the four Arab-Mediterranean countries of Jordan, Tunisia, Morocco and Egypt. Through the declaration, the four countries expressed their intention to establish a free- trade area between them.

Objectives
- Creation of a free trade area between the Member Countries (Egypt - Jordan - Morocco - Tunisia).
- Boosting trade between the four member countries mainly between them and the E.U.
- Economic development and integration through the implementation of the Pan-Euro-Med rules of origin.
- Attraction of EU and international FDI as Agadir Agreement creates a free trade zone including until now more than 120 million consumers.

The Agadir agreement, which lies within the scope of the Barcelona process, is one of the preferential regional agreements of the Pan-Euro-Mediterranean system.

The Agadir Technical Unit, quartered in Amman, the Hashemite Kingdom of Jordan, started its missions on April 8th 2007 under the presidency of the executive director and the Technical Unit staff from the four member countries immediately after the publishing of customs circulars of the four member countries regarding the immediate implementation of the agreement.

The Agadir Agreement and the Pan-Euro-Mediterranean system of cumulation of origin
In the EuroMed area, the implementation of the diagonal cumulation of origin is governed by the rule known as "variable geometry". This rule stipulates that the countries of this area cannot cumulate the origin unless the free trade agreements including a Pan-Euro-Mediterranean protocol of origin are applicable to them.

Consequently, if a country of the Pan-Euro-Mediterranean area is not bound to the other countries of the area by free trade agreements, it cannot in practice, profit from the cumulation of origin.

Prerequisites to the implementation of the cumulation of origin:
- existence of a free trade agreement;
- signed between the country of manufacture, the materials supplying countries and the country of destination;
- comprising identical rules of origin.

The Jordanian economy enjoyed its third successive year of growth in 2006 – a happy upward trend that analysts expect will continue for the next four years. Tourism and banking have been star performers, while industry is benefiting from expansion in the construction sector and investment is pouring into heavy and light manufacturing. Improvements in the kingdom's legal and regulatory framework; a faster pace of privatisation; and the changes in Iraq following the 2003 war are credited as the reasons behind the growth, which has resulted in a boom in foreign investment, reaching $3.1bn in 2006.

The automotive sector, considered as sensitive, is of particular importance in regional trade agreements, which are in general favorable to the development automobile trade. On the medium term, these agreements shall favor new areas or countries that are still protectionist, and will allow them while opening up, to draw many benefits in terms of subcontracting.

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Arab, Mediterranean, Free, Trade, Agreement, Agadir, Regional Trade, Agadir Countries, Egypt, Morocco, Tunisia, Jordan, Trade, European Union, Doing Business, Automotive, sector, Master, International Business