Sustainability Impact Assessment of the Euro-Mediterranean Free Trade Area. Final Report Phase 3 (November 2007)

This report presents the results of a sustainability impact assessment (SIA) study undertaken for the European Commission to assess the economic, social and environmental impacts of the evolving Euro-Mediterranean Free Trade Area (EMFTA).The SIA analyses the impacts of four components of a postulated EMFTA scenario, in comparison with a without EMFTA baseline scenario. The four components cover removal of tariff and non-tariff barriers for: industrial products; agriculture; services; and south-south trade liberalisation. Liberalisation of industrial products is as defined in the current Association Agreements between the EU and MPCs. For the other three components, the postulated scenario includes all the major issues covered by the ongoing negotiations. For industrial products, some of the impacts will already have occurred in those MPCs that have begun tariff reductions.The findings of the SIA study indicate that the EMFTA can help to deliver large economic benefits to both the EU and MPCs, but only if carried out as part of a comprehensive development strategy in each of the partner countries, in combination with measures to achieve fuller economic integration across the region as a whole. In the absence of such strategic measures, in individual MPCs and regionally under the co-responsibility of the EU and MPCs, the economic benefits of the EMFTA are small, and may be accompanied by significant adverse social and environmental effects.