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The Barcelona Declaration provides for a free‐trade area between the EU and 12 Mediterranean partners. A free‐trade agreement between the EU and Tunisia came into effect in March 1998. Others have been concluded or are being negotiated. But no free‐trade agreements have been concluded among Mediterranean partners. The emerging ‘hub‐and‐spokes’ structure will increase the EU's power to direct investment. Other shortcomings are the agreements’ exclusion of agricultural trade and the welfare costs imposed by their preferential nature. The 12‐year transition envisaged is too short for the partners to implement the investment and reforms necessary to face unimpeded competition. However, the area will succeed if the agreements’ dynamic provisions come into effect: free trade in farm products some time after 2000, mutual recognition of standards, and freer trade in services. The higher financial aid envisaged is being directed judiciously. The Euro‐Mediterranean agreements provide for their own updating when new...

Egypt, the oldest and most populous country in the Arab world, and one of its most influential in the Southern Mediterranean region, is now moving into the global economy. During the 1990s the country has pursued successful macroeconomic stabilisation policies and has also begun the structural reform programmes needed to put the country onto an export-led, high-growth path. The main constraint for this is the need to introduce change at a pace which will not undermine political stability.This paper reviews the results of the Uruguay Round Trade Agreements from the perspective of the Egyptian economy, examines the country’s economic relationships with the European Union in the context of the Europe-Mediterranean Partnership Initiative, and identifies main domestic policy challenges. It argues that the European Union could offer more technical assistance and better access for Egyptian agricultural products, while Egypt could further liberalise its trade regime, including ...