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Southern Neighbourhood

The long-term objective of the trade partnership between the EU and its Southern Neighbourhood is to promote economic integration in the Euro-Mediterranean area, removing barriers to trade and investment between both the EU and the Southern Neighbourhood countries (Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine*, Syria, Tunisia), and between the Southern Neighbourhood countries themselves.

A network of Euro-Mediterranean Association Agreements established free trade areas between the EU and most of its Southern Neighbours (with the exception of Syria and Libya), and essentially cover trade in goods. Negotiations to create Deep and Comprehensive Free Trade Areas (DCFTAs) have been launched between the EU and Morocco, and between the EU and Tunisia.

In 2021, under the new EU Trade Policy Review, the EU has announced a new sustainable investment initiative for interested partners in the Southern Neighbourhood and Africa.

Trade picture

Southern Neighbourhood:

Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria, Tunisia

  • In 2020, the region represented 4.6% of total EU external trade. Total trade in goods between the EU and the Southern Neighbourhood countries amounted to €149.4 billion. The EU’s imports were worth €58.0 billion, whereas its exports totalled €91.4 billion.

EU-Southern Neighbourhood: Trade in goods

Trade in goods 2018-2020, € billions
Year EU imports EU exports Balance
2018 147.8 174.5 26.7
2019 150.5 173.0 22.5
2020 120.5 161.3 40.7

Unless otherwise mentioned “EU” concerns for all indicated years the current European Union of 27 Member States.

Date of retrieval: 12/04/2021

EU and the Southern Neighbourhood

The EU established its privileged partnership with the Southern Neighbourhood in 1995 with the launch of the Euro-Mediterranean Partnership at the Barcelona Conference, aiming to establish an area of peace, stability, economic prosperity, upholding democratic values and human rights.

As a continuation of the Euro-Mediterranean Partnership, the Union for the Mediterranean was launched In 2008. This inter-governmental partnership promotes cooperation and dialogue in the Euro-Mediterranean region and brings together all 27 EU Member States and 15 countries of the Southern and Eastern Mediterranean (Albania, Algeria, Bosnia and Herzegovina, Egypt, Israel, Jordan, Lebanon, Mauritania, Monaco, Montenegro, Morocco, Palestine*, Syria – suspended, Tunisia and Turkey; Libya is an observer. Since 2012, the EU and Jordan hold the joint presidency of the Union for the Mediterranean.

Trade relations between the EU and its Southern Neighbours are managed at the bilateral level through the free trade areas established under the framework of the Euro-Mediterranean Association Agreements and essentially cover trade in goods. Nearly all countries have concluded Association Agreements with the EU, except for Libya and Syria.

Country Status Date signed Entry into Force Reference
Algeria Signed April 2002 September 2005 OJ L 265
Egypt Signed June 2001 June 2004 OJ L 304
Israel Signed Nov 1995 June 2000 OJ L 147
Jordan Signed Nov 1997 May 2002 OJ L 129/02
Lebanon Signed June 2002 April 2006 OJ L 143/06
Morocco Signed Feb 1996 March 2000 OJ L 70/00
Palestine Signed Feb 1997 Interim Agreement July 1997 OJ L 187/97
Syria Initialled (December 2008)      
Tunisia Signed July 1995 March 1998 OJ L 97/98

On 10 November 2020, the trade ministers of the Union for the Mediterranean convened for the 11th Trade Ministerial Conference. In their joint statement they called for the strengthening of trade ties as a crucial element for regional economic recovery, and launched three new initiatives to further facilitate and increase trade and investment flows.

The 25th anniversary of the Barcelona Process in November 2020 was an opportunity to reflect on the EU’s strategic partnership with its Southern Neighbourhood in light of the political, socioeconomic, financial and environmental challenges exacerbated by the Covid-19 pandemic, and to reassess the EU’s partnership with the region. This reflection resulted in a Joint Communication by the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy on ‘A renewed partnership with the Southern Neighbourhood – A new Agenda for the Mediterranean’ and the annexed ‘Economic and Investment Plan for the Southern Neighbours’ in February 2021.

Also in February 2021, under the new EU Trade Policy Review, the EU announced a new sustainable investment initiative for interested partners in the Southern Neighbourhood and Africa.

Deepening economic integration between the Southern Neighbours is an essential factor for the socio-economic development of the region. In 2004, Egypt Jordan, Morocco and Tunisia signed the Agadir Agreement. The agreement committed signatory parties to removing all tariffs on trade between one another, and to harmonise their legislation on standards and customs procedures. The Agadir Agreement entered into force in July 2006, and an Agadir Technical Unit in Amman ensures its implementation. Lebanon and Palestine joined the Agreement in 2020.

However, the regional economic integration between Southern Mediterranean countries is still limited: intra-regional trade is a small fraction of the countries’ total trade, representing one of the lowest levels of regional economic integration in the world.

More information on the cooperation with the Southern Neighbourhood
In 2021, the European Commission published the Ex-Post Evaluation of Trade Chapters of the Six Euro-Mediterranean Association Agreements with the EU’s Southern Neighbours: Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia. The evaluation’s main objective was to assess the effects of trade chapters and propose recommendations for further enhancing economic integration in the Euro-Mediterranean area.

Trading with the Southern Neighbourhood

* This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.