Rethinking the EU’s Mediterranean policy after the Arab Spring

The Arab Spring was an expression of people’s dissatisfaction with political regimes that failed to meet their aspirations to freedom and prosperity. Five years later, that transition is proving difficult and protracted in Egypt and Tunisia, modest and gradual in Morocco and Jordan and disastrous in Libya and Syria.

What, then, can or should the EU do both to facilitate these transitions and contribute to the resolution of conflicts in the region? To what degree should the EU care about what happens in this region, and does it need to rethink its own approach towards its southern neighbours? The answer to all of these questions is “yes” for a number of reasons. The collective political, cultural and economic power of the EU countries, along with their historical ties and geographic proximity, mean that they clearly can play an important role. The EU will be more secure and economically better off when its neighbours are peaceful and comparatively well-governed and prosperous. If these reasons are convincing, the key question is what should the EU’s new policy be in the wake of the Arab Spring?

Any rethink of the EU’s role should begin with a better understanding of what has actually transpired in the region since December 2010. A number of stories are told to explain what happened, but for me the most convincing one is as follows. Before the uprisings, the rulers in the region had struck an authoritarian bargain with their citizens, according to which Ben Ali in Tunisia, Mubarak in Egypt and others delivered economic handouts in return for political acquiescence. These economic handouts took different forms, including government employment, free social services and large subsidies for commodities. In return, the rulers had remained in power indefinitely, and some even considered passing down power to their sons. Following the process of economic liberalisation that has begun in the early 1990s, economic growth picked up in countries like Egypt and Tunisia, although most of the benefits went to “loyalists” of the regimes. The poor and even the middle classes saw the benefits they received dwindle, with their opportunities for upward social mobility diminishing. Coming at a time when democracy was spreading abroad and people were becoming better educated and well informed at home, these Arab regimes found themselves increasingly under pressure. The authoritarian bargain eventually broke down when people around the region, especially the young, took to the streets demanding “bread, freedom and social justice”.

These political developments have important implications both for future rulers in the region and for the EU’s relationship with these countries. The new rulers will be judged by their people on the basis of how much progress they make on political inclusion, respect for liberties and shared prosperity. Detours and setbacks are possible, indeed they are likely, but the forces that led to the Arab spring remain poised for further mobilisation if and when it is necessary. The best long-term policy towards the region that the EU and other external actors should adopt, therefore, is one aligned with these popular aspirations, and not with the interests of autocratic rulers seeking short-term gains. This shift will require a fundamental rethink of the EU’s strategy towards the region, not just its instruments and modalities.

Looking back over the last two decades, the Barcelona process that began in 1995 marked a post-colonial formalisation of the relationship between the EU and its south Mediterranean neighbours. Europe was at that time largely motivated by the peace process between Israel and the Arab countries, and although the Palestinian-Israeli conflict remains unresolved, the Barcelona process led to a number of Association Agreements, including those with Morocco, Tunisia, Egypt and Jordan. In 2004, the EU adopted its European Neighbourhood Policy (ENP), involving the development and implementation of a mutually agreed programme of specific actions with individual countries. The ENP’s range of issues is vast, embracing security, stability and justice as well as freedom and prosperity. Now, a decade on, the ENP is being evaluated in a process that provides an opening for fresh thinking on the best way forward.

In doing so, it is important for all concerned parties to recognise that the EU’s Association Agreements and neighbourhood policy are not the same as accession to the European Union. This is not a matter of linguistics. By excluding accession, justified as that may be, the countries around the Mediterranean’s southern rim cannot benefit from full access to EU markets, from greater mobility of production factors like capital and labour, or the harmonisation of regulations and policies, let alone from any degree of participation in the EU decision-making process. Furthermore, the EU’s leverage in its dealings with the southern countries is reduced, while the incentives to undertake reforms by southern countries are weakened. The case of Turkey is revealing, because before its prospects of joining the EU had all but disappeared, accession provided Ankara with a very strong motivation for undertaking reforms that are now paying off in both economic and geopolitical terms.

Leaving aside the accession issue, the EU’s actions so far have generally been far from perfect. From an economic perspective, the Association Agreements took the form of shallow rather than deep Free Trade Agreements (FTAs). They focused on the liberalisation of trade barriers through lower or even zero tariffs, but involved no commitment to introduce reforms in areas like competition policy, public procurement and the protection of intellectual property rights. The benefits from these shallow FTAs have therefore tended to be modest in terms of trade creation compared to trade diversion. It is reform not at the frontier but within the domestic economy that tends to generate the most significant gains. Mexico in the context of NAFTA is a good example of this, because its structural reforms made it a far more attractive investment destination and gave its trade reforms greater credibility.

As to the breadth of coverage, the EU’s agreements included neither agriculture nor services. They were instead limited to manufactured goods, where the southern neighbours had limited comparative advantages. The dicey issues of labour mobility, meaning migration, and capital flows were not addressed.

The manner in which the Association Agreements and the ENP action programmes were negotiated was such that the process was conducted on a bi-lateral basis between the EU and its different Arab partners. There were no common rules similar, for example, to those embodied in the Maastricht treaty of 1992 that amongst other issues shaped the EU enlargement process. This differentiated treatment with its bi-lateral negotiations was justified on the grounds of the flexibility needed to deal with the heterogeneity of these southern countries. But they also meant that their autocratic rulers could rush into signing these agreements to bolster their own legitimacy and benefit their supporters, rather than to secure shared and lasting economic gains.

In sum, although imports from the EU to the countries of the Middle East and North Africa have increased since the launch of the Barcelona process, their exports to the EU have stagnated. Illegal migration has persisted and capital flows into the region are all too meagre. Other than voluntary transfers by tourists and the remittances home of people living in the EU, little has been achieved. And certainly the official financial transfers of the EU and European governments to the region have been too small to make a difference.

These agreements have also done little to promote intra-regional integration. The original promise was that the South-South integration associated with the signing of multiple FTAs with the EU would create a larger market and positive synergies among these economies. Unfortunately, these expectations have not been fulfilled.

For all of the above, it is high time now for the EU to change course. If it is to benefit from the experience it has gained to date, the EU should align its new policy towards southern Mediterranean countries with the aspirations of their people, not their rulers. This means that the focus should not only be on economic growth and on dialogue solely with the rulers, but also on wealth distribution and on dialogues with civil society. Short of accession to the EU itself, the new policy should involve deeper structural reforms that would have a significant and lasting impact. Migration, capital flows and governance must not be left out this time around. The Arab countries involved should be offered a common set of rules for integration with the EU that would leave them the choice of whether or not to take part. Fresh negotiations can still be handled bi-laterally, building on existing agreements, but greater South-South integration should be encouraged, possibly starting with the Maghreb countries. Regional infrastructure projects could be part of the new policy. The guiding principle in all of this should be “convergence” rather than accession, association or the neighbourhood. And needless to say, a clear distinction should be drawn between countries that are in transition and those in conflict.

Straightforward as these recommendations are, they are nevertheless likely to be resisted within the EU by interest groups like farmers, by some EU member states that may be adversely affected, by those bureaucrats who prefer modest change rather than major shifts or policy battles, and by popular opinion among electorates sensitive to migration. It also seems reasonable to say that the destiny of the Arab spring countries will be determined at home through dynamic processes involving interest groups and institutions. But a powerful neighbour like the EU can and should play a catalytic role in this transition process and in the resolution of conflicts, for its own self-interest if for nothing else.