{"id":33840,"title":"Matching EU-MENA Trade Relations to the Green Economic and Social Transition Starts at COP28","link":"https:\/\/bst-europe.eu\/de\/europe-in-the-world\/matching-eu-mena-trade-relations-to-the-green-economic-and-social-transition-starts-at-cop28\/","date":"8. Dezember 2023","date_unix":1702019450,"date_modified_unix":1747997334,"date_iso":"2023-12-08T07:10:50+00:00","content":"

The strong economic ties between the EU and the Middle East and North Africa (MENA) hold significant potential for addressing the common challenges of an environmental, economic, and social transition. The two regions‘ demographics, economic development, and natural resources are complementary. However, seizing these opportunities requires urgent updates not only in the trade relationship but also in the broader partnership strategy, as both face competition from the US and China. In this light, a serious, targeted push for a rules-based, sustainable trans-Mediterranean economy could be instrumental in realising shared values and serving common interests.<\/em><\/p>\n

For a more comprehensive and in-depth look at the implementation of our findings, explore our infographic provided here<\/a>.<\/em>
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Hard facts: Why EU-MENA trade matters<\/strong><\/h2>\n

Is there more to be gained for both sides from EU-MENA trade relations, today or in the future? Yes, there is – if we act now. From a European perspective, the MENA region has been a source of concern rather than optimism. It is a region torn by conflict<\/a>, hit hard by climate change<\/a> and at risk of losing more and more of its youth to opportunities abroad<\/a>.<\/p>\n

Yet it is on a path of steady economic growth. Green energy could be the key to unlocking trade potential, as the time is ripe to rebuild economic relations on a progressive and forward-looking basis, particularly in light of recent geopolitical developments.<\/p>\n

Data indicate that the MENA region is slowly strengthening its global economic position. While the population share of the US and the EU, along with China, is expected to continue to decline, the MENA region’s share is projected to increase to more than 7 per cent of the world population.<\/p>\n

We observe a similar trend in terms of GDP: Currently, the MENA region’s economic contribution is approximately half that of the EU and the US, but it is anticipated to gain relative economic significance, in contrast to the predicted declines in the US and the EU.<\/p>\n

Competing among friends: EU and the US trade agreements compared<\/strong><\/h2>\n

The EU must move quickly towards deeper trade integration with its neighbours if it doesn’t want to be left behind. In terms of trade volume, the EU is still the most important player in the MENA region’s external trade, although China and the US have made significant gains in recent years.<\/p>\n

The EU will have to take action if it does not want to lose its position as the partner of choice for green initiatives. Of the three big players, the EU still has the highest number of trade agreements with countries in the region.<\/p>\n

\"trade<\/a><\/p>\n

However, the US has managed to negotiate more comprehensive agreements than the EU with several countries. And these could prove significant as they cover areas that may soon prove to be vital.<\/p>\n

The US-Morocco free trade agreement<\/a> scores higher on the depth index<\/a> than the EU-Morocco association agreement<\/a>, despite the fact that Morocco and the EU have had a Green Partnership Agreement<\/a> since October 2022 because it covers intellectual property rights, provision on services and public procurement. In particular, cross-border frameworks for intellectual property rights may be critical for future innovation, which in turn is vital to green, economic and social transition.<\/p>\n

\"trade<\/a><\/p>\n

Hence, it is high time to reinvigorate the long-standing EU-MENA trade relationship and make its arrangements fit for the challenges ahead. The depth assessment of trade agreement confirms the damaging effects of the loss of momentum in EU-MENA trade negotiations over the past decade, during which most initiatives to build deep and comprehensive free trade agreements (DCFTAs) out of former free trade agreements (FTAs) have come to a standstill.<\/p>\n

Morocco is a well-chosen starting point for a regional update because of its early advances in renewable energy and its Green Partnership with the EU. So is T\u00fcrkiye, certainly from an economic point of view but also from a geostrategic one<\/a>, as it occupies a key position between the Mediterranean and the Black Sea. The discussion about the EU-T\u00fcrkiye customs union modernisation<\/a> has not made significant progress since 2018, despite the fact that T\u00fcrkiye is the EU’s most important trading partner in the region and is still a candidate for EU membership.<\/p>\n

Facing China: Reflecting on values could be the edge in systemic rivalry<\/strong><\/h2>\n

In the face of competition<\/a>, the EU must also step up its efforts to secure new trade agreements. China has excelled at what the EU used to consider its prerogative: establishing a reliable set of core principles and utilizing these as a foundation for trade relationships.<\/p>\n

China also seems to be much closer to a free trade agreement<\/a> with the economic powerhouses of the Gulf Cooperation Council (GCC) countries than the EU is. Indeed, Chinese President Xi Jinping\u2019s visit<\/a> to Saudi Arabia gave a strong<\/a> signal. China may even want to conclude the deal in the coming months.<\/p>\n

Perhaps the greatest obstacle to the EU’s negotiating efforts is its inability to persuade. It may, therefore, be necessary for the EU to take a step back and commit to a comprehensive, honest and binding assessment of shared values in order to take two steps forward. The EU has embraced the idea of universal values in the belief that long-term political projects need common foundations to give them stability, as in a rules-based international order, mere force cannot be an option.<\/p>\n

But taking this premise seriously in the EU-MENA context may require the EU to start from scratch rather than relying on familiar assumptions about what values do and do not carry weight. Such a process is hard and risky work, but it could make the EU uniquely more persuasive than simply invoking interests that others may be better placed to serve.<\/p>\n

That’s one of the reasons why a potential EU-GCC (Gulf Cooperation Council) free trade agreement has yet to move beyond the dialogue stage<\/a>, although the appointment of former Italian Foreign Minister Luigi Di Maio as EU Special Representative for the Gulf region<\/a> was an important step in the right direction.<\/p>\n

A European investment in credible unity will certainly yield results, while its absence may be costly. Above all, partners value respect \u2013 respect that the EU could show by making up its mind before coming to the negotiating table. The case of the Arab Gulf states shows that the significant political and socio-economic influence of key regional players is extremely important. The influence of the Gulf States<\/a>, T\u00fcrkiye<\/a>, Morocco<\/a> and Algeria<\/a> already extends beyond the immediate neighbourhood and will continue to do so for years to come.<\/p>\n

The way forward: A targeted approach to a sustainable partnership<\/strong><\/h2>\n

In the face of competition<\/a>, the EU must also step up its efforts to Green energy, especially green hydrogen<\/a>, could be the catalyst for EU-MENA trade. Both sides have long recognised the potential match between supply and demand. It is now up to the EU to finally bring about the alignment of interests and values that is the great promise of its Green Deal<\/a> to green energy trade across the Mediterranean.<\/p>\n

Today, more than ever, the EU cannot afford to repeat the mistakes of the past<\/a> that have left this potential untapped, especially given the evolving global energy landscape. Unlike the US and China, which are most likely to meet their growing demand for renewable energy domestically, the EU<\/a> may have to rely on external sources for the foreseeable future.<\/p>\n

Projections show<\/a> the important role that EU-MENA trade could play in meeting Europe\u2019s demand for green energy through green hydrogen. The deployment of hydrogen<\/a>, both as an industrial feedstock and in energy transport, is both technologically feasible and cost-effective.<\/p>\n

From a purely European perspective, almost half<\/a> of the demand for green hydrogen could be met by imports from the MENA region by 2050. However, when looking at the more detailed results, regional perspectives are clearly more important. It is countries like Morocco, Algeria, Tunisia, and Egypt on whose early contributions to green hydrogen the EU will depend.<\/p>\n

\"energy<\/a><\/p>\n

Making it work: Changing perspective to justify rules<\/strong><\/h2>\n

EU policymakers therefore need to put themselves in the shoes of MENA societies and governments to understand what they can offer that will both convince governments and benefit societies in return for a share of their green energy production capacity. All these countries face both internal tensions and regional conflicts.<\/p>\n

Algeria and Morocco, rich in resources, have long vied for regional leadership<\/a>. Egypt<\/a> and Tunisia<\/a> face unprecedented socio-economic pressures. Hopes that democracy and freedom of speech would bring peace and prosperity have generally receded in favour of a new social contract in which governments guarantee a minimum of good governance in return for almost complete political autonomy, widening the epistemic gap between the two shores of the Mediterranean.<\/p>\n

Hence, building trust in a rules-based relationship that doesn\u2019t disproportionately favour one side over the other will be key. The EU\u2019s High Representative for Foreign Affairs and Security Policy, Josep Borrell, has led the way: His statements on the Hamas-Israel war, which emphasised the role of universal responsibilities enshrined in international law<\/a> from the outset, allowed him to take a firm but balanced stance, a stance that may prove crucial to sustaining EU-MENA relations in the face of such extraordinary challenges.<\/p>\n

But EU policymakers shouldn’t be naive. It will take a concerted effort not to lose sight of the bigger picture when responding to emerging conflicts. Therefore, it is also particularly vital that the EU avoid divisive tendencies in European migration debates. It does not unnecessarily entangle itself in another externalisation and returns dilemma with Egypt, a leading country in green hydrogen production<\/a> with the first operational green hydrogen production plant<\/a> in the region.<\/p>\n

Putting the catalyst into practice: Accelerating Green Hydrogen Projects<\/strong><\/h2>\n

For now, getting projects over the finish line is the most pressing challenge. Only two of the 71 green hydrogen projects in the MENA region<\/a> are currently operational.<\/p>\n

\"energy<\/a><\/p>\n

Strengthening implementation and absorption capacity in both the EU and MENA countries is therefore crucial. Scaling up funding, as Germany has recently done<\/a>, is an important step in this direction. Global Gateway<\/a> provides a framework for resource pooling, leaving adequate flexibility for innovative initiatives.<\/p>\n

Efforts to integrate European energy markets<\/a> must continue, as this would provide an important intra-European basis for effectively integrating imports. Interconnectivity with the MENA region<\/a> should be an integral part of the necessary infrastructure development. Crucially, both sides must ensure that the potential for renewable energy production in the MENA region is developed in a way that balances the EU’s need for green hydrogen imports with local demand for green energy.<\/p>\n

Rather than extending short-term budget support<\/a>, the EU could provide targeted funding linked to progress in renewable energy development. This approach guarantees predictable export revenues for the MENA region and supports the decarbonisation efforts of both EU and MENA economies. In this way, green energy could become a real catalyst for EU-MENA trade relations.<\/p>\n

About the authors<\/strong><\/p>\n

Alexander Weber studies German and International Law at the Humboldt-Universit\u00e4t zu Berlin. His interests include the topics of migration, security, and the rule of law. He is a graduate of the Akademie Ausw\u00e4rtiger Dienst (Foreign Service Academy).<\/p>\n

As of June 2023, Anna Hautmann is a Project Manager within the Europe\u2019s Future Programme at Bertelsmann Stiftung. Currently, her work revolves around examining the EU\u2019s critical interdependencies, alongside a broader engagement in analysing economic topics through the application of econometric methods.<\/p>\n

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