07 Jun 2021

Post-Covid-19 EU-Southern Neighbourhood Trade Relations

The global COVID-19 pandemic has profoundly affected the daily functioning of societies and their economies all over the globe. While its impact on international trade may fortunately be less severe than initially expected, the decline is still palpable, with the latest estimations of 5.6% and 15.4% drop in value of trade in goods and services respectively in 2020 compared to the year before. For countries in the MENA region, where trade in goods accounts for up to 85.6% of GDP in the case of Egypt, and 65.3% of GDP for trade in services in the case of Jordan (2009-2017 averages), decline in revenue from trade creates a serious risk for their economies. Equally importantly, due to high dependence on merchandise imports – including those of staple goods – trade disruptions imperil their security and stability.

Against this background, this policy study explores the impact of the first months of the ongoing pandemic on trade relations between the EU and countries in the Southern Neighbourhood (SN), as well as – whenever possible – sub-Saharan Africa. The authors start by reviewing the existing legislative framework for trade between the EU, the SN and the African continent as a whole. Subsequently, they assess the direct and indirect impact of COVID-19 on intra- and inter-regional trade in goods and services between SN countries and the EU. A particular focus is placed on the tourism and agricultural sectors, both of crucial importance to the region. The authors also explore the ways in which the disruptions identified have affected food security in the SN region. Finally, based on findings of the study, the authors explore different scenarios for the evolution of intra- and inter-regional trade during the post-pandemic period and offer policy recommendations for reinvigorating trade cooperation between the three regions of interest to the study as well as strengthening of the economic performance of the SN.

 

Authors: Katarzyna W. Sidło (Coordinator), Esmat Mostafa Kamel, Hussein Suleiman, Guillaume Van der Loo

This Study was published by the European Institute of the Mediterranean

 

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