The Euro-Med Agreements. Some lessons for Syria

1. The Euro-Med Agreements. Some lessons for Syria Jose-Maria Garcia-Alvarez-Coque, Professor of Economics, UPV, Valencia, jmgarcia@upvnet.upv.es “The Contribution of Agriculture and Rural Development to the Process of Economic Reforms of Syria” (Damascus, 1-2 July 2008)

2. Syrian agro-food exports (2001 – 2006) • based on UN data (see SAT) • Per capita exports • Market diversification • Product diversification • Live animals, cotton, olive oil, edible vegetables and fruits account for nearly 50% of non-oil exports • The EU accounts for nearly 18 of total agricultural exports. • Out of it: • Cotton and textile by-products: 40% • Olive oil: 27%

3. Factors of export success: Comparative advantages (factor driven economy) Market access in foreign markets Adaptation to global supply chains + Competitive advantages

4. Syrian rank in GCI (out of 48 ‘factor driven’ economies) Source:WEF Basic requirements • Institutions + • Infrastructure + • Macroeconomy + • Health and primary education ++ Efficiency enhancers • Higher education and training + • Market efficiency - - • Access to technology - Innovation factors • Business sophistication + • Innovation ≈ ++ 1 to 8+ 9 to 19-+ 20 to 25- 26 to 36-- 37 to 48

5. Factors of export success Comparative advantages (factor driven economy) Market access in Foreign markets Adaptation to global supply chains + Competitive advantages

6. EMAs in force

7. The EU market-access issue • The Association Agreement will open: • New market opportunities. • Stable framework for trade • So far trade preferences have not become a great impulse of SMC exports to the EU, but a continuation of traditional trade flows • Doha negotiations could change the picture • On what depends the benefits of the Association Agreement?

8. Percentage of ‘potential exports’ to the EU Group of countries: Egypt, Jordan and Lebanon Source: Martí Selva and Alvarez-Coque (2007)

9. Doha may have some impact Sources: EU Commission (2008), Garcia Alvarez-Coque et al. (2007)

10. Factors of export success: Comparative advantages (factor driven economy) Market access in foreign markets Adaptation to global supply chains + Competitive advantages

11. Farmers Wholesale market Commissioners Local commissioners Exporters Packing houses Foreign market The traditional marketing

12. Adaptation to supply chains • Stakeholders in value chains share interests in cost reduction, quality upgrading and risk management. • Need to understand what enables coordination forms in the value chain to perform successfully. • Value chain competitiveness needs targeted measures different from traditional subsidies

13. Need for a systemic approach • Government bureaucracy • Access to financing • Corruption • Inadequately educated workforce • Foreign currency regulations • Supply of infrastructure • Restrictive labour regulations • Tax regulations • Market efficiency • Access to technology

14. Areas for research • Impacts of trade liberalization, detailed by product, season and territory • The issue of preferences versus multilateral liberalization • The growing role of SPS and TBT standards, including the quality policy of large retailers • Supply chains and the agro-food system • Domestic Policies • Transnational cooperation is a must for the analysis of Euro Mediterranean integration: research groups, workshops

15. Thanks!