Agadir Agreement

Agadir Agreement

Agadir Agreement (AFTA) is a free trade area agreement between Jordan, Tunisia, Egypt, and Morocco which is supported by the EU. The agreement was signed on February 25, 2004 and has entered into force on March 27, 2007. All industrial and agricultural products are exempted from the entire tariff and the non-tariff measures.

Main objectives and goals are to promote economic integration and cooperation among Mediterranean countries and with the EU . It is considered a strategy in reaching the better EuroMed integration. Agadir agreement will help member countries to strengthen economics to become more competitive and more attractive for FDI which would help lifting the economies, bring in new technologies, and increase the employment rate to support the development and raise the living standard in the region. However, some trade barriers still exist despite the agreement’s entering into force in 2007.

SWOT

Strengths of the agreement include its attractive large market of 120 million people and its cumulative rules of origin which allows goods that are processed in more than one of the member countries to access and sell in the EU. This means that all member countries can cooperate in producing goods to exports to the EU with reduced tariff. Moreover, all member countries are associated with the EuroMed and this agreement is strongly supported by the EU.

Despite its strengths, there’re currently only four members participating which makes it not yet a very strong bloc. In addition, all member countries are going through economic reforms, which can be a very slow process till everything can be set in place.

The EU is looking forward in trading with the Middle East countries to create the hub and spokes effect therefore, this has given an opportunity for Agadir Agreement to progress an important step in establishing the EuroMed between the EU and the Mediterranean countries. The agreement will also help moving the stalled GAFTA (Greater Arab Free Trade Area) forward into a better integration.

There’re other regions in the world fighting to attract investments and investors will definitely go for the most favorable place. To cope with this threat, member countries should closely work together. But somehow, the tighter their integration is, the more their economies become interdependence. The member countries in the region would be in jeopardy and risk themselves in crisis if some member countries’ economies started falling off.

PESTEL

Politics may seem to be a slight weakness among member countries. Tunisia seems to be the only country with political and legal environment in good shape. There’re political stability in the country, corruption in control, and an effective government while other three countries faced some political instability. Jordan and Egypt both have some issues with corruption .

Some improvements are shown through GDP growth among these countries as they’re going through an economic reform. The biggest contribution to the GDP for