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Jan 01 0001
EU’s Trade Policy in the Four Seas: A Multilateral Approach
By Panagiotis Liargovas
In a number of policy papers, the EU has recognized the economic and trade importance of the four sea basins – the Baltic Sea, the Black Sea, the Caspian Sea, and the Mediterranean Sea. Specifically, the population in the four sea basins amounts to around 1 billion people. In more details, countries of the Baltic Sea represent a population of around 304 million with an average GDP per capita of around $25,000. The Black Sea countries represent a population of around 323 million with an average GDP per capita of around $11,000. The Caspian Sea countries represent a population of around 359 million with an average GDP per capita of around $9,000. Finally, the Mediterranean Sea countries represent a population of around 522 million with an average GDP per capita of around $16,000. Therefore, in terms of population size (demand), all the four sea basins are significant.
There are, however, great economic disparities among them. For example, per capita GDP in Sweden is $36,502 whereas in Belarus is $13,864. Under a neoclassical convergence hypothesis all the less developed countries of the four sea basins have a potentiality in terms of GDP per capita. Theoretically speaking then, trade potential between EU and the four regions could be quite large. We should not ignore, however, the importance of political, social and ethnic problems in a number of countries.
But according to gravity models,[①] bilateral trade flows are not only explained on the basis of individual characteristics of each partner (size and level of economic development), but also on the characteristics of the country pair (distance between them and whether they share a common border, language, or currency). As far as the distance is concerned, most of these countries are in the EU neighborhood. The Baltic Sea is in northeastern Europe, bounded by the Scandinavian Peninsula, the mainland of east and central Europe, and the Danish islands. The Black Sea is an inland sea bounded by Europe, Anatolia and the Caucasus and is ultimately connected to the Atlantic Ocean via the Mediterranean and Aegean Seas. The Bosporus strait connects it to the Sea of Marmara, and the strait of the Dardanelles connects it to the Aegean Sea region of the Mediterranean. The Caspian Sea is between Europe and Asia, bordering Azerbaijan, Russia, Kazakhstan, and Iran. And finally, the Mediterranean Sea is surrounded by the Mediterranean region and almost completely enclosed by land: on the north by Anatolia and Europe, on the south by Africa, and on the east by the Levant. EU’s trade interests in the area are also strengthened since all the four sea basins are enriched with natural resources such as petroleum, natural gas and primary products.
Increased trade flows between EU and the regions could also serve as a means to reduce poverty. It is well established that trade provides opportunities by expanding markets, infusing new technologies and improving productivity, which leads to overall growth. Further, higher trade benefits low-skilled labor-intensive production, hence increasing demand and wages of low-skilled workers in developing countries, contributing to poverty reduction. Some have also argued that developing countries pursuing an export promoting (as opposed to an import-substituting) strategy will have to maintain macroeconomic stability. This reduces inflation fluctuations to which the poor are most vulnerable. Therefore greater orientation to trade encourages countries to adopt stable macroeconomic policies, which invariably favor the poor.
I. EU’s Trade Policy towards Four Sea Basins
The current status of the EU trade policy towards the four seas is covered under the general framework of the EU regional trade agreements (RTAs) as well as the EU Free Trade Agreements (FTAs). In the 1990s, EU’s FTAs policy was replaced with multilateral trade negotiations under the umbrella of World Trade Organization (WTO). Throughout the negotiations under WTO the EU has backed multilateralism. However, due to internal and external reasons, the EU started to re-direct the route toward FTAs with a Communication published in 2006, known as “Global Europe”. [②]
According to “Global Europe”, the EU adopted a more aggressive FTA policy by determining economic criteria such as economic size, growth, tariffs and non-tariff barriers as the basis for new FTAs in order to ensure the competitiveness of the European economy. Therefore, FTAs which represent for the EU a subway to implement her deep trade agenda, known as Deep and Comprehensive Free Trade Areas (DCFTA), are seen as a bilateral means to the end of multilateral liberalization and rule making. Another important issue of the new generation FTAs is that, without WTO negotiations, the EU sees these FTAs as an opportunity to negotiate regulatory and beyond-the-border issues that are not included in the Doha Round, and also to deal with ‘tough’ issues like agriculture, which seems almost impossible to solve in the multilateral talks.[③]
The European Union’s trade policy instruments consist of both bilateral cooperation, e.g., The European Neighbourhood Policy (ENP), Association Agreements (AA), Partnership and Cooperation Agreements (PCAs) and multilateral cooperation, e.g., Eastern Partnership (launched in Prague in May 2009), the Union for the Mediterranean (the Euro-Mediterranean Partnership, formerly known as the Barcelona Process, re-launched in Paris in July 2008), and the Black Sea Synergy (launched in Kiev in February 2008)
Through the ENP the European Union offers her neighbors a privileged relationship, building upon a mutual commitment to common values (democracy and human rights, rule of law, good governance, market economy principles and sustainable development). The ENP goes beyond existing relationships to offer political association and deeper economic integration, increased mobility and more people-to-people contacts. The ENP remains a pale imitation of enlargement instruments without an accession perspective, although it does not prejudge, for European neighbors, how their relationship with the EU may develop in future, in accordance with Treaty provisions. The EU designed the ENP as a form on conditionality, a policy tool utilized by the EU in both its foreign and trade policy.[④]
Central to the ENP are the bilateral Action plans between the EU and each ENP partner. These set out an agenda of political and economic reforms with short and medium-term priorities of 3 to 5 years. The ENP builds upon existing agreements between the EU and the partner in question: Partnership and Cooperation Agreements (PCA) or Association Agreements (AA). Accession to the WTO is a prerequisite for EU membership and it is part of the EU’s strategies toward its neighbors as the EU links political and economic considerations in implementing those strategies.[⑤]
The EU’s trade policy impact is characterized by both achievements and failures. Regarding the former, one has to admit that in contrast to the rigid Copenhagen Criteria that characterized enlargement policy, the ENP is a differentiated policy in that it involves tailor-made agreements and conditions. Furthermore, the ENP is a type of structural foreign policy that aims to shape the EU’s external environment by exporting EU norms and institutions to other countries.
Also, according to an EU Commission Report on Progress achieved on the Global Europe Strategy, 2006-2010, FTA negotiations launched under the economic criteria defined by “Global Europe” have made good progress. Nonetheless, progress on some negotiating objectives beyond tariffs set out by “Global Europe” has been more mixed. These objectives, which were identified as crucial for securing real market access in the 21st century, included non-tariff barriers, access to resources and energy, services and investment, intellectual property rights(IPR), public procurement and competition policy. A major and visible aspect of “Global Europe” has been the renewed Market Access Strategy (MAS), a new cooperation initiative in Brussels and on the ground in key markets between the Commission, Member States and business to address the key barriers that hold back EU trade. The Market Access Strategy helps European companies, including SMEs, access third country markets by providing information on market access conditions (free online Market Access Database — MADB) and removing market access barriers. [⑥]
A problematic issue, however, is related to the demanding nature of DCFTAs which makes it quite difficult for new association agreements to be signed. For many developing countries of the four sea basins it is all looking like a delaying tactic: make the conditions so severe that they will not agree, and so leave them in indefinite uncertainty. Unless there is some sharp rethinking and policy movement in the EU institutions, requiring also movement in the mandates they receive from the member states, there will be no further progress in bilateral trade.
A recent survey conducted in the four sea basins also revealed the following:[⑦]
(1) EU enlargement did not have a positive impact on the Mediterranean region because the preoccupations of the countries of northern Europe are totally different from those of the southern European countries. The enlargement has driven the preoccupations of Europe eastwards. At the same time, the new EU members are not very interested in establishing relations with the countries of the southern Mediterranean, above all for cultural reasons. Also in economic terms the companies belonging to these countries do not enjoy the same facilitations of those belonging to the southern European countries when they make business in the southern shore of the Mediterranean.
(2) The ENP in 2004 was a dramatic shift for the region; it was designed for eastern European countries, and was very much based on differentiated bilateralism rather than multilateralism; the idea was to Europeanise without enlarging, so it was not good in fostering sub-regionalism in the Southern Mediterranean.
(3) The Black Sea Synergy has produced positive results by encouraging cooperation between the countries surrounding the Black Sea. The synergy offered a forum for tackling common problems while encouraging political and economic reform.
(4) Finally, the EU Strategy for the Baltic Sea Region contributes to more intensive cooperation between the Baltic countries and shapes the region into a regional cooperation model for the whole EU. The strategy focuses on four areas: environment, economy, accessibility and security. The implementation of the strategy is financed from different EU funds in the area including the Baltic Sea Region Programme.
II. Multilateral Cooperation Rooms in Four Sea Basins
There are many reasons which explain recent EU’s emphasis on bilateral agreements in the four sea basins. First, they seem quicker to conclude. This is usually very attractive to both politicians and business communities who are looking for quick results. Second, they can enter into new areas. Because of similarities in interests and often more common values, bilateral trade agreements can go into new territories such as investment, competition, technical standards, labour standards or environment provisions, where there is no consensus among WTO Members. Thirdly, many of the recent FTAs contain political or geopolitical considerations. For developing countries in the four Seas negotiating with the EU, there is usually the expectation of exclusive preferential benefits, as well as expectations of development assistance and other non-trade rewards. Finally, they are often used as instruments for domestic reform in areas where the multilateral system offers a weaker leverage.
But bilateral agreements have also limitations. First, the conclusion of preferential trade agreements can create an incentive for even further discrimination, which eventually will hurt all trading partners. Countries outside an agreement will try to conclude agreements with one of those that are inside to avoid exclusion. In other words, the consequence is that the preferences obtained through forming a preferential agreement against competitors tend to be short-lived. Secondly, bilateral agreements cannot solve systemic issues such as rules of origin, antidumping, agricultural and fisheries subsidies. Thirdly, the proliferation of regional trade agreements can greatly complicate the trading environment, creating a web of incoherent rules. For example, rules of origin complicate the production processes of business who may be obliged to tailor their products for different preferential markets in order to satisfy them. Finally, to many small and weak developing countries, entering into a bilateral agreement with the EU means less leverage and a weaker negotiating position as compared that in the multilateral talks.
The above arguments suggest that theoretically there is plenty of room for multilateral cooperation in the four sea basins. But there are many practical problems. Take for example the Caspian Sea case.[⑧] The region vitally needs constructive and efficient multilateral cooperation based on common interests of riparian states in economic and social development, preventing terrorism and proliferation of WMD. Yet such multilateralism is rather a theoretical possibility than practical perspective. The principal barriers result from Russian strive for domination in the region including if necessary the use of force, as we saw in Georgia; Iranian odious approach to the main issues of the legal status of the Caspian Sea; and, of course a set of unresolved disputes and controversies between the three new independent states of the Caspian area. In addition, multilateral cooperation is not promoted because there is a fear that international environmental regulation may be used to hamper their highly important economic activities such as oil extraction and fishing as well onshore activities. For instance, Russia and Iran argue that the construction of a gas line along the Caspian Sea floor can go ahead as long as an ecological examination is carried out and the results are satisfactory to all the Caspian states. On one hand this appears quite reasonable, but in practice, this merely allows any Caspian state to disagree with the results and block the pipeline construction. Thus, the Caspian can hardly be seen as a laboratory of cooperation.[⑨]
Less can be said, however, about the Black Sea basin cooperation, where EU has strategic interests as three littorals-Greece, Bulgaria and Romania are EU members.
III. Conclusions and Policy Recommendations
The presented analysis so far leads us to some policy conclusions as regards EU strategy towards the four sea basins:
1. According to Michael Emerson, the concept of ‘Deep and Comprehensive Free Trade’ should be reconsidered and adapted to the circumstances of the Eastern partners, bearing in mind also that the Mediterranean partners were granted free trade without this Deep and Comprehensive addition. Emerson suggests as an optional template a Basic Free Trade Agreement (BFTA) for the time being, starting soon. The degree of mandatory EU acquis compliance would be limited to that strictly required for trade; to go further would be an option that would receive EU encouragement and assistance, but not an obligation or pre-condition. Otherwise no policy movement will mean no free trade deliverables.[⑩]
2. Further progress in extending services trade liberalization, including regulatory aspects, will require a close interface between Single Market policies for services and, on the external front, agreement on specific conditions to be met on a case-by-case basis, ensuring a certain level of approximation of rules and regulatory systems.
3. The lack of multilateral cooperation in Caspian and therefore the EU’s role in the area is due to some basic contradictions. The main contradiction has to do with the substance of the pattern of cooperation across the region. It was initiated by the states themselves and then followed by the European Union with the intention to develop economic basis of cooperation, but without addressing security issues. The Caucasus Caspian experience showed that so far successful economic cooperation has been built along strategic security or political partnership.[11]
4. Much remains to be done in terms of private investments, which still are not attracted to the South (e.g. Mediterranean Sea countries), and this is due to the lack of political and legal security, with varying standards and high-security risks.
5. The EU should instead accompany the economies of the Mediterranean region in their transition process by increasing the flow of investments, the transfer of competence and of know-how and by removing the qualitative barriers to the access to the European market of the products coming from this region.
6. The complicated EU bureaucracy is another aspect which does not facilitate the relations between the countries of the Mediterranean region and the EU.
7. Political problems often create barriers to any effort. The key issue is to learn to cooperate ignoring the political controversies. Instead of isolating a country, it is preferable that the country concerned receives funds, regardless of the political scenario (example of Tunisia), so you can revert to the population and influence economic development. While previously prompted to give support to dictatorial regimes in various governments in the Mediterranean Sea, the EU should now establish clear conditions and a multilateral basis.
8. The Black Sea experience shows that multilateral cooperation could include integrated border management, enhancement of small and medium enterprises and response to human and natural disasters.
9. Finally, an example of one successful project, a good approach or practice, to be used for the future a lot under neighbourhood can be seen in the close cooperation between Albania and Italy on neighbourhood projects, in terms of maritime and security development and through small and medium enterprises. There is also cooperation in education between universities in the regions.
But according to gravity models,[①] bilateral trade flows are not only explained on the basis of individual characteristics of each partner (size and level of economic development), but also on the characteristics of the country pair (distance between them and whether they share a common border, language, or currency). As far as the distance is concerned, most of these countries are in the EU neighborhood. The Baltic Sea is in northeastern Europe, bounded by the Scandinavian Peninsula, the mainland of east and central Europe, and the Danish islands. The Black Sea is an inland sea bounded by Europe, Anatolia and the Caucasus and is ultimately connected to the Atlantic Ocean via the Mediterranean and Aegean Seas. The Bosporus strait connects it to the Sea of Marmara, and the strait of the Dardanelles connects it to the Aegean Sea region of the Mediterranean. The Caspian Sea is between Europe and Asia, bordering Azerbaijan, Russia, Kazakhstan, and Iran. And finally, the Mediterranean Sea is surrounded by the Mediterranean region and almost completely enclosed by land: on the north by Anatolia and Europe, on the south by Africa, and on the east by the Levant. EU’s trade interests in the area are also strengthened since all the four sea basins are enriched with natural resources such as petroleum, natural gas and primary products.
Increased trade flows between EU and the regions could also serve as a means to reduce poverty. It is well established that trade provides opportunities by expanding markets, infusing new technologies and improving productivity, which leads to overall growth. Further, higher trade benefits low-skilled labor-intensive production, hence increasing demand and wages of low-skilled workers in developing countries, contributing to poverty reduction. Some have also argued that developing countries pursuing an export promoting (as opposed to an import-substituting) strategy will have to maintain macroeconomic stability. This reduces inflation fluctuations to which the poor are most vulnerable. Therefore greater orientation to trade encourages countries to adopt stable macroeconomic policies, which invariably favor the poor.
I. EU’s Trade Policy towards Four Sea Basins
The current status of the EU trade policy towards the four seas is covered under the general framework of the EU regional trade agreements (RTAs) as well as the EU Free Trade Agreements (FTAs). In the 1990s, EU’s FTAs policy was replaced with multilateral trade negotiations under the umbrella of World Trade Organization (WTO). Throughout the negotiations under WTO the EU has backed multilateralism. However, due to internal and external reasons, the EU started to re-direct the route toward FTAs with a Communication published in 2006, known as “Global Europe”. [②]
According to “Global Europe”, the EU adopted a more aggressive FTA policy by determining economic criteria such as economic size, growth, tariffs and non-tariff barriers as the basis for new FTAs in order to ensure the competitiveness of the European economy. Therefore, FTAs which represent for the EU a subway to implement her deep trade agenda, known as Deep and Comprehensive Free Trade Areas (DCFTA), are seen as a bilateral means to the end of multilateral liberalization and rule making. Another important issue of the new generation FTAs is that, without WTO negotiations, the EU sees these FTAs as an opportunity to negotiate regulatory and beyond-the-border issues that are not included in the Doha Round, and also to deal with ‘tough’ issues like agriculture, which seems almost impossible to solve in the multilateral talks.[③]
The European Union’s trade policy instruments consist of both bilateral cooperation, e.g., The European Neighbourhood Policy (ENP), Association Agreements (AA), Partnership and Cooperation Agreements (PCAs) and multilateral cooperation, e.g., Eastern Partnership (launched in Prague in May 2009), the Union for the Mediterranean (the Euro-Mediterranean Partnership, formerly known as the Barcelona Process, re-launched in Paris in July 2008), and the Black Sea Synergy (launched in Kiev in February 2008)
Through the ENP the European Union offers her neighbors a privileged relationship, building upon a mutual commitment to common values (democracy and human rights, rule of law, good governance, market economy principles and sustainable development). The ENP goes beyond existing relationships to offer political association and deeper economic integration, increased mobility and more people-to-people contacts. The ENP remains a pale imitation of enlargement instruments without an accession perspective, although it does not prejudge, for European neighbors, how their relationship with the EU may develop in future, in accordance with Treaty provisions. The EU designed the ENP as a form on conditionality, a policy tool utilized by the EU in both its foreign and trade policy.[④]
Central to the ENP are the bilateral Action plans between the EU and each ENP partner. These set out an agenda of political and economic reforms with short and medium-term priorities of 3 to 5 years. The ENP builds upon existing agreements between the EU and the partner in question: Partnership and Cooperation Agreements (PCA) or Association Agreements (AA). Accession to the WTO is a prerequisite for EU membership and it is part of the EU’s strategies toward its neighbors as the EU links political and economic considerations in implementing those strategies.[⑤]
The EU’s trade policy impact is characterized by both achievements and failures. Regarding the former, one has to admit that in contrast to the rigid Copenhagen Criteria that characterized enlargement policy, the ENP is a differentiated policy in that it involves tailor-made agreements and conditions. Furthermore, the ENP is a type of structural foreign policy that aims to shape the EU’s external environment by exporting EU norms and institutions to other countries.
Also, according to an EU Commission Report on Progress achieved on the Global Europe Strategy, 2006-2010, FTA negotiations launched under the economic criteria defined by “Global Europe” have made good progress. Nonetheless, progress on some negotiating objectives beyond tariffs set out by “Global Europe” has been more mixed. These objectives, which were identified as crucial for securing real market access in the 21st century, included non-tariff barriers, access to resources and energy, services and investment, intellectual property rights(IPR), public procurement and competition policy. A major and visible aspect of “Global Europe” has been the renewed Market Access Strategy (MAS), a new cooperation initiative in Brussels and on the ground in key markets between the Commission, Member States and business to address the key barriers that hold back EU trade. The Market Access Strategy helps European companies, including SMEs, access third country markets by providing information on market access conditions (free online Market Access Database — MADB) and removing market access barriers. [⑥]
A problematic issue, however, is related to the demanding nature of DCFTAs which makes it quite difficult for new association agreements to be signed. For many developing countries of the four sea basins it is all looking like a delaying tactic: make the conditions so severe that they will not agree, and so leave them in indefinite uncertainty. Unless there is some sharp rethinking and policy movement in the EU institutions, requiring also movement in the mandates they receive from the member states, there will be no further progress in bilateral trade.
A recent survey conducted in the four sea basins also revealed the following:[⑦]
(1) EU enlargement did not have a positive impact on the Mediterranean region because the preoccupations of the countries of northern Europe are totally different from those of the southern European countries. The enlargement has driven the preoccupations of Europe eastwards. At the same time, the new EU members are not very interested in establishing relations with the countries of the southern Mediterranean, above all for cultural reasons. Also in economic terms the companies belonging to these countries do not enjoy the same facilitations of those belonging to the southern European countries when they make business in the southern shore of the Mediterranean.
(2) The ENP in 2004 was a dramatic shift for the region; it was designed for eastern European countries, and was very much based on differentiated bilateralism rather than multilateralism; the idea was to Europeanise without enlarging, so it was not good in fostering sub-regionalism in the Southern Mediterranean.
(3) The Black Sea Synergy has produced positive results by encouraging cooperation between the countries surrounding the Black Sea. The synergy offered a forum for tackling common problems while encouraging political and economic reform.
(4) Finally, the EU Strategy for the Baltic Sea Region contributes to more intensive cooperation between the Baltic countries and shapes the region into a regional cooperation model for the whole EU. The strategy focuses on four areas: environment, economy, accessibility and security. The implementation of the strategy is financed from different EU funds in the area including the Baltic Sea Region Programme.
II. Multilateral Cooperation Rooms in Four Sea Basins
There are many reasons which explain recent EU’s emphasis on bilateral agreements in the four sea basins. First, they seem quicker to conclude. This is usually very attractive to both politicians and business communities who are looking for quick results. Second, they can enter into new areas. Because of similarities in interests and often more common values, bilateral trade agreements can go into new territories such as investment, competition, technical standards, labour standards or environment provisions, where there is no consensus among WTO Members. Thirdly, many of the recent FTAs contain political or geopolitical considerations. For developing countries in the four Seas negotiating with the EU, there is usually the expectation of exclusive preferential benefits, as well as expectations of development assistance and other non-trade rewards. Finally, they are often used as instruments for domestic reform in areas where the multilateral system offers a weaker leverage.
But bilateral agreements have also limitations. First, the conclusion of preferential trade agreements can create an incentive for even further discrimination, which eventually will hurt all trading partners. Countries outside an agreement will try to conclude agreements with one of those that are inside to avoid exclusion. In other words, the consequence is that the preferences obtained through forming a preferential agreement against competitors tend to be short-lived. Secondly, bilateral agreements cannot solve systemic issues such as rules of origin, antidumping, agricultural and fisheries subsidies. Thirdly, the proliferation of regional trade agreements can greatly complicate the trading environment, creating a web of incoherent rules. For example, rules of origin complicate the production processes of business who may be obliged to tailor their products for different preferential markets in order to satisfy them. Finally, to many small and weak developing countries, entering into a bilateral agreement with the EU means less leverage and a weaker negotiating position as compared that in the multilateral talks.
The above arguments suggest that theoretically there is plenty of room for multilateral cooperation in the four sea basins. But there are many practical problems. Take for example the Caspian Sea case.[⑧] The region vitally needs constructive and efficient multilateral cooperation based on common interests of riparian states in economic and social development, preventing terrorism and proliferation of WMD. Yet such multilateralism is rather a theoretical possibility than practical perspective. The principal barriers result from Russian strive for domination in the region including if necessary the use of force, as we saw in Georgia; Iranian odious approach to the main issues of the legal status of the Caspian Sea; and, of course a set of unresolved disputes and controversies between the three new independent states of the Caspian area. In addition, multilateral cooperation is not promoted because there is a fear that international environmental regulation may be used to hamper their highly important economic activities such as oil extraction and fishing as well onshore activities. For instance, Russia and Iran argue that the construction of a gas line along the Caspian Sea floor can go ahead as long as an ecological examination is carried out and the results are satisfactory to all the Caspian states. On one hand this appears quite reasonable, but in practice, this merely allows any Caspian state to disagree with the results and block the pipeline construction. Thus, the Caspian can hardly be seen as a laboratory of cooperation.[⑨]
Less can be said, however, about the Black Sea basin cooperation, where EU has strategic interests as three littorals-Greece, Bulgaria and Romania are EU members.
III. Conclusions and Policy Recommendations
The presented analysis so far leads us to some policy conclusions as regards EU strategy towards the four sea basins:
1. According to Michael Emerson, the concept of ‘Deep and Comprehensive Free Trade’ should be reconsidered and adapted to the circumstances of the Eastern partners, bearing in mind also that the Mediterranean partners were granted free trade without this Deep and Comprehensive addition. Emerson suggests as an optional template a Basic Free Trade Agreement (BFTA) for the time being, starting soon. The degree of mandatory EU acquis compliance would be limited to that strictly required for trade; to go further would be an option that would receive EU encouragement and assistance, but not an obligation or pre-condition. Otherwise no policy movement will mean no free trade deliverables.[⑩]
2. Further progress in extending services trade liberalization, including regulatory aspects, will require a close interface between Single Market policies for services and, on the external front, agreement on specific conditions to be met on a case-by-case basis, ensuring a certain level of approximation of rules and regulatory systems.
3. The lack of multilateral cooperation in Caspian and therefore the EU’s role in the area is due to some basic contradictions. The main contradiction has to do with the substance of the pattern of cooperation across the region. It was initiated by the states themselves and then followed by the European Union with the intention to develop economic basis of cooperation, but without addressing security issues. The Caucasus Caspian experience showed that so far successful economic cooperation has been built along strategic security or political partnership.[11]
4. Much remains to be done in terms of private investments, which still are not attracted to the South (e.g. Mediterranean Sea countries), and this is due to the lack of political and legal security, with varying standards and high-security risks.
5. The EU should instead accompany the economies of the Mediterranean region in their transition process by increasing the flow of investments, the transfer of competence and of know-how and by removing the qualitative barriers to the access to the European market of the products coming from this region.
6. The complicated EU bureaucracy is another aspect which does not facilitate the relations between the countries of the Mediterranean region and the EU.
7. Political problems often create barriers to any effort. The key issue is to learn to cooperate ignoring the political controversies. Instead of isolating a country, it is preferable that the country concerned receives funds, regardless of the political scenario (example of Tunisia), so you can revert to the population and influence economic development. While previously prompted to give support to dictatorial regimes in various governments in the Mediterranean Sea, the EU should now establish clear conditions and a multilateral basis.
8. The Black Sea experience shows that multilateral cooperation could include integrated border management, enhancement of small and medium enterprises and response to human and natural disasters.
9. Finally, an example of one successful project, a good approach or practice, to be used for the future a lot under neighbourhood can be seen in the close cooperation between Albania and Italy on neighbourhood projects, in terms of maritime and security development and through small and medium enterprises. There is also cooperation in education between universities in the regions.
Source of documents:
more details:
[①] For the gravity model see Jeffrey H. Bergstrand, “The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence,” The Review of Economics and Statistics, Vol. 67, No. 3, 1985, pp. 474–481.[②] For a general overview of EU trade policy, see http://ec.europa.eu/trade.
[③] See Sevil Acar Mahmut Tekçe, “Multilateralism or Bilateralism: Trade Policy of the EU in the Age of Free Trade Agreements,” International Conference on Emerging Economic Issues in a Globalizing World, Đzmir, 2008, in http://eco.ieu.edu.tr/wp-content/proceedings/2008/0817.pdf.
[④] For an extended analysis of EU ENP policy, see http://ec.europa.eu/world/enp/policy_en.htm.
[⑤] Miguel Rodriguez Mendoza, “Trade and Trade Policies in the 4 Seas: The Interface between the WTO and EU Frameworks,” EU4 papers, 2009, p. 8.
[⑥] See Commission Staff Working Document, “Report on Progress Achieved on the Global Europe Strategy, 2006-2010,” SEC (2010), 1268/2, http://trade.ec.europa.eu/doclib/docs/2010/ november/tradoc_146941.pdf.
[⑦] The field research of the EU4Seas project was designed to provide empirical evidence which is comparable amongst topics, within sub-regions and across the four covered areas. For more details, see http://www.eu4seas.eu/.
[⑧] For an extended analysis, Yury Federov, “The Caspian: An area of Multilateral Cooperation or the Sea of Troubles?” EU4 papers, 2009.
[⑨] For more details, see Leila Alieva, “The EU Policies and Sub-Regional Multirateralism in the Caspian Basin,” EU4 papers, 2009.
[⑩] For more details, see Michael Emerson, “Rendezvous with Eastern Europe,” CEPS Commentary, Brussels, 2010.
[11] Alieva, “The EU Policies and Sub-Regional Multirateralism in the Caspian Basin,” p. 22.