OF THE UNITED NATIONS
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| FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS |
ISLAMIC DEVELOPMENT BANK | |||||
High-Level Technical Workshop
"Regional Programmes for Food Security in the Near East:
Towards Sustainable Food Security and Poverty Alleviation"
Jeddah, 8-9 October 2003
Overview of food and Agriculture production in the NE Region
Challenges and constraints to food and agricultural trade in the NE region
Overview of the SPS and TBT agreements and their implication on food trade:
Implication of SPS and TBT agreements on food trade for the countries in the NE region
Food trade in the Near East countries is characterized by high commodity concentration: High dependence on food imports especially cereals and dominance of fruits and vegetables in agricultural exports.
Imports of cereals, especially wheat, are increasing rapidly and exceed agriculture exports in value and represent a major foreign exchange cost especially for low-income countries. Ability to import is an essential component of sustainable food security in the region.
Most countries especially the non-oil exporting countries are facing difficulties in developing adequate foreign exchange earnings to finance food imports. Such state of affairs can expose the countries to risky situation, both economical and political.
The cost of food imports represents about 34% of the NE countries total value of merchandise exports and about 30% of cereals used in the region come from imports, and wheat constitutes the most important single commodity (40%) of total cereal imports. Net imports of coarse grains to provide feedstuffs for the expanding livestock industry are increasing steadily (six fold since 1970). Consequently, food could be a direct cause of worsening trade deficits.
In general, there are considerable differences between countries with regard to self-sufficiency in food especially staple food crops. The region has become increasingly more dependent on food imports in recent years, and the food gap is expected to widen, due to failure to expand agriculture production to keep pace with the rapid growth in demand as a result of population increase and rise in prices. FAO projection for 2010 suggests that an ever-widening food gap will have to be filled by imports.
Most countries in the region suffer from deficit in their agricultural trade balance. Value of exports of agricultural commodities of the NE region is negligible as compared to the value of total world exports of agricultural commodities. Most countries in the region, especially the Mediterranean ones, have strong economic ties with the developed countries in general and the European countries in particular. EU imports of agricultural product are mostly fruits and vegetables; fresh as well as proceeded. These product groups together with olive oil fish and to lesser extent, cotton, cover about 85% of total agricultural exports from the NE countries, especially the Mediterranean Basin countries (MB) to EU.
Agriculture in the region operates under severe limitations of water resources. Scarcity of irrigation water constitutes the fiercest challenge of agriculture in the NE countries. Only few countries depend strongly upon irrigation, the rest depend on rain to support agriculture. Rainfall in many of the NE countries is not only scarce but also highly fluctuating, with corresponding fluctuation of crop production and hence in the size of the food gap. The large disruptions of cereal production create deficit in basic food stuffs that cannot be met by countries in the region without relying on imports and hence must find supplementary foreign exchange to cover such imports or seek external food aid.
The main external market for fruits and vegetable is the EU, the tariffs of which vary by product, season, and country of origin, with higher tariffs being imposed during the periods when imports compete with domestic production. The growing scarcity of water may drive some of the NE countries to shift further to the production of fruits and vegetables, which have a relatively higher return to water use. Consequently, trade of fruits and vegetables with EU can be expected to increase in such a case.
Agriculture trade in the region is constrained by poor production structures and inability to meet the foreign demand for certain qualities and in certain seasons. In addition, agricultural production systems are similar and therefore the countries in the region tend to import the same commodities and export the same commodities as well.
There is also a considerable lack of co-ordination of economic policies in the countries of the region; a matter, which contributes significantly to the unsatisfactory performance of agricultural trade in the region. In spite of the numerous trade agreements between the countries, especially the Arab countries the principles used for the calculation of the tariffs rates, and hence the tariff rates themselves, are widely different from one country to the other.
For examples, according to the agreements between the Arab countries regarding trade exchange facilities and regulation of transit trade, most primary agricultural commodities are exempted from tariffs and the tariff rates are subject to reduction by 50% for processed agricultural products such as butter, cheese, sugar, apricot syrup and dried onions and dried garlic. However, the full tariff rates are currently applied in most countries and complicated administrative procedures are usually asked for in order to provide some kind of protection to certain commodities. In general, most countries in the region are not seriously interested in following up on agreements due to fear of dumping possibilities, loss of custom duty revenue, and jeopardy of economic development programs.
In addition, most countries in the region lack marketing systems that would enable the movement of goods to the international markets. This includes lack of transportation and shipping facilities suitable for overseas marketing, poor packing and packaging facilities, lack of cold storage, lack of information on foreign markets, difficulties in the dissemination of information, and poor post harvest technologies. Large crop losses usually result from such a situation.
There have been several attempts in the region to co-ordinate and integrate the economic development programs, especially among the Arab countries, unfortunately, most of these arrangements are not actually effective in fostering economic co-operation between the countries in the region due to a range of constraints from poor infrastructure to administrative and political difficulties which cut across natural markets. In general, the relative importance of intra-trade among countries of the region is variable and as a whole is very small and is conducted between two or three countries in the region.
As far as economic aspects are concerned, the core element of the new agreements is the creation of bilateral free trade areas between each of the MB countries and the EU by 2010. For industrial goods, completely free trade is planned, with import barriers of the EU to be immediately removed, while a transition period is envisaged for the MB countries. Agricultural goods, on the other hand are exempted from free trade commitment, but are subject to preferential trade rules. This means that for particular products, tariff reductions are applied, limited to fixed quantities and certain periods of the year in many cases.
The opening of additional markets for industrial products originating from the EU is an important economic factor for the EU. The MB group of countries counts a population of more than 150 million representing a significant potential for future consumption. For the MB countries, on the other hand, the EU is the main trading partner, regarding imports as well as exports. Access to EU markets is therefore a central interest to the MB countries. The EU and the MB countries are important trading partners for each other, although, for reason of size, the EU is of course a more important trading partner for MB than the MB for the EU. The EU is also a much more important trade partner for the MB countries on their export side than on the side of their imports.
Many of the NE countries are opening up their agricultural markets at three distinct but increasing levels; unilateral liberalization, regional integration schemes and multilateral liberalization. These changes result in important implications for intra- and extra-regional trade, use of agricultural resources and sustainability of agricultural development in the NE region.
Unilaterally, most countries in the region have liberalized their agricultural sectors by eliminating or reducing input subsidies, removing or reducing guaranteed producers prices, reducing the number of subsidized commodities and liberalizing exchange rate and the trade regime. However, some of the NE countries were able to continue supporting agriculture, mainly for food security reasons.
Agriculture trade liberalization is also taking place in the context of several regional trading agreements, most important among which are the Arab Free Trade Areas (AFTA), the Gulf Co-operation Council (GCC), the Arab Maghreb Union (AMU) and the EU Mediterranean Agreements. Regional integration continues to be an issue of great concern in the NE and promotion of intra-regional agricultural trade remains a key objective in all regional trading agreements (RTAs) in the region. The new rules of the international trading system set by the UR brings regional co-operation in the NE again to the forefront.
The most remarkable development in the agricultural trade liberalization process is the access of 15 NE countries to the WTO, (9 countries are observers) and the commitments they made under its various agreements, particularly the SPS and the TBT. Many countries in the region agreed to a set of principles to reduce trade distortions caused by agricultural policies. However, despite progress achieved in the implementation of this agreement, the international trade system remains unbalanced. Moreover, the complexity of import regimes and of accessing tariff rate quotes as well as the costs of complying with SPS and TBT agreements continue to create obstacles to market expansion which may be insurmountable especially for small economies. In addition liberalization of agriculture carries the risk of increasing food import bills.
The main accomplishments of relevance to agriculture and food security issues include specific binding commitments by WTO members to improve market access and to reduce production- and trade-distorting domestic support and export subsidies.
Among the agreements administration by the WTO, two agreements have a significant impact on the practices and conditions of international trade in food. They include the agreement on the application of Sanitary and Phytosanitary Measures (SPS) and the agreement on Technical Barriers to Trade (TBT).
The SPS agreement has as its primary purpose the protection of human, animal and plant life and health through the implementation of sanitary and phytosanitary measures that are justifiable and are not disguised technical barriers to trade. Considering only those provisions related to sanitary protection measures, the SPS agreement has specific provisions related to public health risks arising from additives, contaminants, toxins, or diseases causing organisms in food, beverages or feedstuffs. In this regard the FAO and the Codex play an important role in meeting the objectives of these agreements. The SPS specifically recognizes the food standards, guidelines and recommendations elaborated by the Codex as the benchmark for the quality and safety of food in international trade. The agreement also requires that Member countries harmonize sanitary and phytosanitary measures on as wide a basis as possible with international standards, guidelines and recommendations; apply equivalence principles in food control program evaluation and establish and implement sanitary and phytosanitary measures in a transparent manner.
The SPS agreement requires that measures taken which impose a higher level of protection than that established internationally by Codex be based on sound scientific evidence, and internationally acceptable risk assessment methods, and be the least trade restrictive.
Other international organizations are also recognized in the SPS agreement relating to the protection of animal and plant life and health. The International Office of Epizootics is recognized as the international standard setting body for all animal health and life protection measures governing live animals traded in international trade. The International Plant Protection Convention is recognized for standards setting that protect the life and health of live plants (phytosanitary measures) traded in international trade.
The TBT agreement applies to all aspects of food standards, which are not covered by the SPS agreement. It seeks to ensure that technical regulations and standards for food, including packaging, marketing and labeling requirements and procedures for assessing conformity with technical regulations and standards do not create unnecessary obstacles to international trade. TBT measures must be shown to have a legitimate purpose, should be based on international standards, and be proportional to the desired purpose. In the framework of Codex, provisions such as quality and composition requirements, labeling, nutrition, and methods of analysis are relevant to the TBT agreement.
Food safety has a big influence on the flow of international food trade. The last few years have witnessed crises, which have affected food safety like the mad cow disease in British cattle and dioxin in foodstuffs produced in Belgium. This has created a lot of concern among consumers and governments and has led to the imposition of bans on meat and meat products suspected of originating from cows affected by the mad cow's disease or foods contaminated with dioxin. This has caused a lot of disruption to international trade.
Similarly, few countries of the region have been the subject of bans from developed countries imposed on their food exports, which has also led to great economical losses. Iranian pistachios were banned in the last few years from the EU and the Japanese markets because of their high content of aflatoxin - a carcinogenic agent - that has led to a great economic loss. Pistachios are Iran's third most important product as foreign-currency earner. Egyptian peanuts have also been the subject of such a ban from the EU because of their high content in aflatoxin, while Egyptian potatoes underwent a ban because of brown rot. In both cases the economic loss for Egypt was big.
In the previous cases, governments worked hard on improving the safety of the banned foods and in complying with the SPS measures applied on these food commodities in developed countries. These efforts have been fruitful in reducing the constraints put on importing these foods into the developed countries.
However, complying with SPS measures of importing countries might not be always easy for many of the countries in the region because of what that requires of human, technical and financial resources that could be lacking. In reviewing the records that some developed countries, especially the USA, keep for reasons of rejecting food shipments coming from some of the countries in the NE from entering the US market, it was observed that 27% of the reasons had to do with not complying with SPS measures (filth, microbiological contamination, more than allowed levels of pesticide residues or food additives) and 58% of the causes related for not complying with TBT (labeling).
Being members of WTO, countries accept the responsibility of the terms of Membership. This means that the measures imposed in protecting the public health against hazards associated with food from imported sources must not be trade restrictive, arbitrary, or disguised technical barriers to trade. Measures are also to be scientifically justified using risk assessments methods acceptable at the international level. Measures can be adopted on the basis of internationally elaborated food standards, guidelines and recommendations as adopted by the recognized international standard setting body and be considered in compliance with the WTO agreements. Import procedures are to be streamlined to eliminate unnecessary and burdensome requirements, which do not serve legitimate purposes.
Food control systems in most of the NE countries are far from ideal. Many of the countries have as yet no comprehensive and self-contained food legislation which would meet the present day requirements in this field. Few countries with the technical assistance of FAO have started to up-date their food legislation by drafting and/or formulating a basic food law, and a comprehensive set of food regulations based on the FAO/WHO Codex Alimentatrius Commission's work. The UAE and Jordan have recently updated and strengthened their food control infrastructure and introduced the risk based system in their food control set ups for both domestic and imported food consignments. Egypt now is reviewing and up-dating its food standards in harmony with the Codex Alimentarius. Food control legislation is also being up-dated in the line with WTO agreements. Food inspection service varies greatly from one country to another. In most countries, analytical service facilities are only adequate for simple routine analysis and as a consequence the food control service, at least in certain aspects, is minimal. In the presence of comprehensive food legislation, and adequate inspection and analytical service, the success of a food control service in providing adequate and effective protection to the consumer as well as the import and export service is dependent on an overall proper administration, capable of overseeing, programming and directing the food control activities.
The NE countries are in need of strengthening their national capacities aiming at up-dating food control infrastructure, in particular laboratory facilities to meet emerging threats of hazards and contamination of chemicals, microbial, or of physical origin, legislation to meet Codex requirements and WTO's agreements of the SPS and TBT including food quality and safety, inspection service and finally administration and enforcement.
The NE countries need to develop positions in a wide range of agricultural trade issues concerning their negotiations with the rest of the world. The common regional stand will carry a weight in global trade negotiations. The existing regional and sub-regional grouping can play a vital role for developing a common agenda and strategy in the international trade milieu. The promotion of intra-regional trade will also serve as a vehicle for furthering food security objectives in the region.
Since many countries in the region are facing serious constraints for the expansion of food products, they may then aim at establishing an appropriate institutional framework for region-wide joint action to create a common management or resources towards regional agricultural co-operation which may help reduce the widening food deficit in the region and enhance food security at national and regional level. This may include: (i) Diversification of food production and exports into newer and where possible higher value product. (ii) Better and economic use of irrigation water and (iii) Use of higher yielding seeds/varieties for food production.
International and regional food trade is continuing to grow as countries rely on each other to secure adequate and varied food supply through the import and export of food products. The opportunities for more growth are envisaged through the international free market governed by the rules of the World Trade Organization. Countries will have improved access to export markets, but this improved access will be accompanied by greater competition and the need to ensure international confidence in the safety of their food supply. This is particularly challenging to NE countries where quality assurance systems in the food industry and food control systems should be strengthened. In addition to an unsafe and poor quality food supply, barriers to international trade can occur where countries impose different requirements at the point of importation. The approach of the trade agreements of adopting international standards and codes of practice can be expected to decrease the variation in requirements imposed in the past by different countries. The emphasis of the Codex on the application of principles of science, risk analysis, and quality assurance to the entire food chain will lead to a greater harmonization between countries.
FAO and donors are urged to continue to to provide and strengthen their technical assistance to member countries so that they can comply with the requirements of the Agreements on the Application of Sanitary and Phytosanitary Measures and Technical Barriers to Trade.
In the initial years of functioning of the world trading system under the auspices of the WTO it has been observed that many countries are trying to set standards which may act as non-tariff barriers, especially to exports originating from developing and least developed countries. Moreover, these barriers are taking new forms, thus making developing and least developed countries more exposed to volatility with respect to sustainable market access in industrialized countries. A number (as well as nature) of trade disputes concerning SPS and TBT agreements highlights that: the WTO members are interested to use these rules to reduce market access opportunities of their trading partners; and in order to do so they are trying to obtain legal jurisprudence on a variety of cases.
This paper tries to give an overview on trading system in the Near East Region, Challenges and constraints to agricultural trade in the region, lessons to be drawn from experience with implementing WTO Agreement on Agriculture in some countries in the region, emphasizing regional co-operation as appropriate instrument for bargaining more effectively within WTO, lessons to be drawn from experience with food control system in some countries in the region and to describe the possible impact of implementing WTO agreements AoA, SPS and TBT on food security in the Near East.
Before the peak of the oil boom in the 1970's, agriculture was the main economic activity in the region and it still remains the backbone of the national economics of most of the countries of the NE region.
Table1 shows the agriculture GDP as a share of total GDP for each country in the region in 2000 (FAOSTAT). Apart from the some of the Gulf countries where this share is very low, it varies from 2.2% for Jordan to 39.4% for Kyrgystan. In addition the agriculture sector employs a sizable share of the labour forces in some of the countries of the region. The share of agriculture in total labour force in 2000 varied a lot between countries, with the highest percentage reached in Dijbouti (79%) followed by Somalia (71%), Sudan (61%), Mauritania (53%), and Yemen (51%) (Table1).
Table1. Agricultural GDP and Agricultural Labour Force in the countries of the Near East in 2000 (FAOSTAT, 2002)
| Country | Agricultural GDP as share of total GDP | Agricultural Labour Force / Total Labour Force |
| Algeria | 8.6 % | 24 % |
| Azerbaijan | 18.9 % | 27 % |
| Bahrain | 0.9 % | 1 % |
| Cyprus | 3.8 % | 9 % |
| Djibouti | 3.7 % | 79 % |
| Egypt | 16.6 % | 33 % |
| Islamic Republic of Iran | 18.9 % | 26 % |
| Iraq | 33.2 % | 10 % |
| Jordan | 2.2 % | 11 % |
| Kazakhstan | 9.2% | 18% |
| Kuwait | 0.4 % | 1 % |
| Kyrgystan | 39.4 % | 26 % |
| Lebanon | 11.9 % | 4 % |
| Libyan Arab Jamahiriya | N.A. | 6 % |
| Malta | 2.8 % | 1 % |
| Mauritania | 22.4 % | 53 % |
| Morocco | 13.5 % | 36 % |
| Oman | 2.8 % | 36 % |
| Pakistan | 26.3 % | 47 % |
| Qatar | 0.5 % | 1 % |
| Kingdom of Saudi Arabia | 6.6 % | 10 % |
| Somalia | N.A. | 71 % |
| Sudan | 37.2 % | 61 % |
| Syrian Arab Republic | 24.1 % | 28 % |
| Tajikistan | 19.4 % | 34 % |
| Tunisia | 12.3 % | 25 % |
| Turkey | 16.2 % | 46 % |
| Turkmenistan | 27.3 % | 33 % |
| United Arab Emirates | 3.3 % | 5 % |
| Uzbekistan | 34.9 % | 28 % |
| Yemen | 15.3 % | 51 % |
In general, there are considerable differences between countries; at one extreme are Turkey and Pakistan which are almost self-sufficient, at the other extreme are countries like Algeria and Jordan which have seen sharp declines in self-sufficiency ratios for staple food crops. In general, the region is becoming increasingly more dependent on food imports in recent years in comparison with previous ones. The food gap continued to widen over the last 25 years, due to failure to expend agriculture production to keep pace with the rapid growth in demand as a result population increase (which in some countries exceeded 3%, the fastest population growth in the world) and expansion of per-capita incomes. FAO projection for 2010 suggests that an ever-widening food gap will have to be filled by imports.
Imports of food, particularly cereals, have increased rapidly over the last 25 years; by about 7% annually. They greatly exceed agriculture exports in value and represent a major foreign exchange cost especially for the low-income countries, for whom the costs of food imports represent 34% of their total value of merchandise exports. Consequently, food imports could be a direct cause of worsening trade deficits.
Nearly 30% of cereals used in the region come from imports. In 1995, imports to the oil-exporting countries, other than Iran, have risen to four times the 1970 level. Wheat constitutes the most important single commodity (40%) in total cereal imports. Net imports of coarse grains increased six-fold since 1970, to provide foodstuffs for the expanding live-stock industry. Dependence on external sources is low for countries with a relatively large agriculture sector, such as Turkey, Pakistan and Sudan. However, even in these countries, there are large year-to-year variations in domestic production, and hence in reliance on imports.
In general, agriculture in the region operates under severe limitations of water resources. Scarcity of irrigation water constitutes the fiercest challenge to agriculture in the NE countries. Consequently, total arable land in the region is rather limited to the extent that only about 4.5% of the total surface area is cultivable. Most of the agriculture potential is concentrated in few countries such as Turkey, Iran, Sudan, Iraq, Morocco, Pakistan and Algeria; the rest of the countries are arid. Only few countries depend strongly on irrigation, the rest depend on rain to support agriculture. In Egypt, Iran and Pakistan the irrigated area is more than 50% of the total arable land, crop yield in some of the irrigated land, particularly in Egypt, is among the highest in the world, due to, among other factors, the usage of high yielding varieties. However, crop yields, in the absence of irrigation, are fairly low in the region.
Also, rapid expansion has occurred in poultry production, and dairy cattle keeping, often on a large-scale commercial basis and in peri-urban areas, in response to fast growing demand for meat.
Rainfall in many of the NE countries is not only scarce but also highly fluctuating. Consequently crop production varies greatly from year to year, with corresponding changes in the size of the food gap. In some countries food production falls below the annual average by more than 30%, every couple of years as a result of weather variations. The large disruptions of cereal production create periodic deficit in basic foodstuffs that cannot be met by countries in the region without relaying on imports and hence must find supplementary foreign exchange to cover such imports.
Unilaterally, and since the late 1980s, most countries of the region have liberalized their agriculture sectors by eliminating or reducing input subsidies, removing or reducing guaranteed producer prices, reducing the number of subsidized commodities and liberating the exchange rate and the trade regime. Some countries have moved from taxing agricultural producers to subsidization. Consumer subsidies have also been reduced, although in most countries they are still as they are at least for certain sensitive basic food commodities such as bread and flour.
Agriculture trade liberalization is also taking place in the context of various regional arrangements, most important among which are the Arab Free Trade Area (AFTA), the Economic Co-operation Organization (ECO), the Gulf Co-operation Council (GCC), the Arab Maghreb Union (AMU) and the on-going negotiations related to the EU-Mediterranean Agreements.
The available statistics indicate that fish, fruits, vegetables and cotton are the main agricultural exports, while cereals, milk and dairy products, sugar and vegetable oils are the main agricultural imports of the NE region. Cereals and milk and milk products constitute more than half the value of food imports for Arab countries combined. About 36.8% of the total value of Arab food imports was devoted to cereal products in 1996 alone. In some populous countries such as Egypt, the value of agricultural imports in 2000 was about 7 times the value of agricultural exports with the share of wheat and maize being 19.9% and 16.1%, respectively of the imports. It is the single largest overseas market for U.S. wheat, importing around 5 million metric tons annually.
Most countries in the region suffer from deficits in their agricultural trade balance. However, few poor countries, like Sudan and Mauritania have shown some positive surpluses in their trade balances.
Except for few countries, agriculture commodities assume a little importance in the total value of exports for the NE region. Similarly, the value of exports of agriculture commodities of the NE region is very negligible compared to the value of total world exports of agriculture commodities.
Among the Arab countries, Egypt, Morocco, Lebanon and Tunisia export more fruits than vegetables, while Jordan and Syria export more vegetables than fruits. Morocco is the top country in both fruits and vegetables exportation, with an annual value of exportation amounting to 198 and 154 million US$ of fruits and vegetables respectively. That of Egypt is about 92 and 51 million US$ for fruits and vegetables respectively.
Most of the NE countries are net food importers with high dependence on food imports. For the region, as a whole, import of cereals, as a proportion of the total annual consumption, expanded from 15% in 1970-75 to 33% in 1980-85 and slowed only slightly (30%) in 1990-96. The import dependence varies considerably between countries. In 1990-96, for instance, Egypt, Algeria and Yemen imported about 55%, 70% and 85% respectively of their requirements of wheat and flour, the staple food in these countries. Such dependence was unsettling to policymakers who feared that reliance on foreign supplies was "too risky" economically and politically.
There have been several attempts in the region to coordinate and to integrate the economic development programs especially among the Arab countries. For example, the Arab Common Market (ACM) was established in 1964 for the purpose of fostering trade among the countries in the region. Several other mechanisms were established to facilitate the common economic activities such as the establishment of the Arab Organization of Agricultural development in 1970 and the establishment of the Arab Monetary Fund in 1978.
Several sub-regional bodies were also created in 1980s. The Arab Gulf Co-operation Council (GCC) was established in 1981 to strengthen the economic relations between Saudi Arabia, Kuwait, Qatar, United Arab Emirates, Oman and Bahrain. Iraq, Jordan, Yemen and Egypt signed the agreement of the Arab Co-operation Council (ACC) in 1989. The Arab Maghreb Union (AMU) was also established in 1989 between Morocco, Algeria, Tunisia, Libya and Mauritania. Finally, all Arab States signed the agreement of the Arab Free Trade Area (AFTA) in 1996. Unfortunately, most of the previous arrangements were not actually effective in fostering economic co-operation between the countries in the region due to a range of constraints from poor infrastructure to administrative and political difficulties, which cut across natural markets. The Arab Co-operation Council was soon demolished right after Iraq invaded Kuwait in 1990.
Geographic proximity plays an important role in establishing intra-trade patterns in the region. Syrian agricultural exports account for the largest percentage of total inter-Arab agricultural exports, amounting to 29%, out of which Saudi Arabia imports about 50%, while the other Arab states import 35%, and the rest goes to Algeria 7%, Jordan 6%, and Egypt 4%. Second comes Saudi Arabia, who exports about 90% of its total agricultural exports to the Arab countries of the neighboring Gulf States. Sudan, Libya and Saudi Arabia absorb about 60% of Egypt's intra-Arab Agricultural exports. For Morocco its major agricultural exports go to Saudi Arabia, which accounts for 49% of its inter-Arab agricultural exports, whereas 21% go to Algeria, 5% to Tunisia and 3% to Egypt. Similarly, most of Algeria's agricultural exports go to Morocco, Tunisia and Egypt. As for Jordan, 30.5 % of its agricultural exports goes to Saudi Arabia.
The relative importance of intra-trade among the countries of the region is variable and as a whole is very small. Except for Oman, the value of intra-imports is less than 10% for most countries. In general, most of the Arab intra-trade is conducted between two or three countries in the region. For example, 96% of Tunisia's exports of cereals to the Arab countries went to Libya in 1996. Similarly, 69% of Syria's exports of cereals to the Arab countries went to Jordan in the same year.
Most countries of the region especially the Mediterranean ones have strong economic ties with the developed countries in general and the European countries in particular. The Mediterranean countries concerned are Morocco, Algeria, Tunisia, Egypt, Jordan, Lebanon, the Palestinian Authority Turkey Malta Cyprus and Syria. The Euro-Mediterranean Association Agreement negotiations have already been concluded with Algeria, Morocco, Tunisia, Jordan, Lebanon, Cyprus, Malta, Turkey, and the Palestinian Authority.
As far as economic aspects are concerned, the core element of this agreement is the creation of bilateral free trade areas between each of the Mediterranean Basin (MB) countries and the EU by the year 2010. For industrial goods completely free trade is planned, with import barriers of the EU to be immediately removed, while a transition period is envisaged for the MB countries. Agricultural goods on the other hand, are exempted from the free trade commitment but are subject to preferential trade rules. This means that for particular products tariff reductions are applied, limited to fixed quantities and certain periods of the year in many cases.
The opening of additional markets for products originating from the EU is an important economic endeavor for both the EU and the MB countries, especially that the latter count more than 150 million in population and as a consequence represent a significant potential for future consumption. For the Mediterranean countries, on the other hand, the EU is the principle trading partner, regarding imports as well as exports. Access to EU markets is therefore of central importance to Mediterranean countries. The EU and the MB countries are important trading partners for each other although, for reasons of size, the EU is of course a more important trading partner for MB than the MB for the EU.
Almost 70% of total agricultural exports of the MB countries goes to the EU and about 30% of total agricultural imports come from the EU. These figures indicate that in relative terms the EU is a much more important trade partner for the MB countries on their export side than on the side of their imports.
About 3% of both the EU total as well as the EU's agricultural imports came from the MB countries and about 4% of its total exports and 6% of its agricultural exports went to the MB group of countries in 1997. These figures indicate that the relative importance of the MB countries as trading partners of the EU is the highest in the area of agricultural exports.
Agricultural exports from EU to the MB countries consist mainly of products like meat, dairy, cereals and sugar, which account for more than 60% of total agricultural exports to the MB countries. Another important product group among EU exports to the MB group is fats and oils, which cover about 10% of agricultural exports.
EU imports of agricultural products from the MB group, on the other hand, are mostly fruits and vegetables, fresh as well as processed, olive oil (included in the product group of fats and oils), fish and to a lesser extent, cotton. These product groups cover about 85% of the total agricultural exports form the MB to the EU.
More than 50% of agricultural exports from MB countries to the EU originate from Morocco, Tunisia, Egypt and Syria. The relative importance of the EU market for exports from the individual MB countries differs extremely. While only 8% of Jordan's total agricultural exports goes to the EU, more than 70% of the total agricultural exports of Morocco and Tunisia enters the EU.
The composition of agricultural exports to the EU also differs widely from country to country. Fish is important only in the case of Algeria, Morocco and Tunisia. Olive oil accounts for more than 55% of Tunisia's agricultural exports to the EU and is quite unimportant for other countries. Wine has a significant share in the cases of Algeria and Lebanon only, and cotton accounts for more than 80% in the case of Egypt, whereas it is of no significance in the other MB countries. Fruits and vegetables are important export products in trade with the EU for all of the MB countries except Syria and Lebanon. Production of fruits and vegetable and trade with EU is expected to increase further in future as the growing scarcity of water may drive many countries to shift further to the production of fruits and vegetable, which have a relatively high return to water use.
