Trade blocs

House of Commons Library

North Africa regional overview 2018

Opportunities for North Africa's young and educated population have not opened up since the uprisings of 2011

Politics

• Tunisias former regime was overthrown, and it is still considered the only country that installed genuine democracy after 2011.
• Now it may now be drifting back towards authoritarianism and the personalisation of politics.

Security

Parts of North Africa have long been troubled by insecurity and unrest; those problems have become far worse in Libya and Egypt, according to one widely-used source. There are many terrorist cells in the region, some local and some linked to external groups such as al-Qaeda in the Islamic Maghreb (AQIM), which has strong links through the Sahel on the southern edge of the Sahara, and ISIS/Daesh, with its connections in the Levant.

Lack of cooperation

• Most North African countries have porous southern borders and a deep tradition of land-based trade routes; smuggling, including of small arms, is endemic and essential to the livelihoods of the small populations who live in border areas in the Sahara. This environment is fertile territory for radical groups to spread their ideologies and to make money, as commentators such as Jacques Rousselier have pointed out:
  1. The patchy and under-resourced nature of the Maghreb states’ security cooperation, marred by the Morocco–Algeria political rivalry and failed or weak governments in Libya and Tunisia, is particularly evident in the border regions’ glaring vulnerabilities to transnational crime, terrorist networks, and illegal migration.
• North African neighbours share many bonds of culture and history, but their political relations with each other are marked by distrust.
• But other factors, including the lack of any central authority in Libya, exacerbate the weakness of regional collaboration, leaving both intra-regional trade and cooperation on security very limited.

Economic growth

• The region has achieved strong growth in the last few years, although a lot of this growth was the result of a recovery in Libyan oil production; much of the region remains dependent on hydrocarbon revenues.
• Nevertheless, unemployment remains high, particularly for young people, graduates and women, and there are many isolated rural areas that do not benefit much from economic growth.

Migration

North Africa is a source of migrants to Europe and several countries have sizeable North African diasporas. The region, particularly Libya, is also a transit route for migrants from Africa south of the Sahara, and there has been a lot of controversy about EU efforts to handle this, such as EU Navfor Med Operation Sophia.

UK action

• The UK Department for International Development and Foreign and Commonwealth Office run the North Africa Regional Cooperation Fund and the North Africa Technical Assistance Facility. Together these funds aim to bolster stability:
  1. …designed to support the delivery of the North Africa [National Security Council] strategy, the objective of which is to achieve sustainable stability, security and prosperity in North Africa, including by tackling long-term structural issues.

  
  The programmes receive Overseas Development Assistance (ODA) money from the Conflict, Stability and Security Fund, overseen by the National Security Council. The North Africa Regional Cooperation Fund’s budget allocation for 2018/9 is £3 million, while the Technical Assistance Facility is spending £5 million.

Brexit

• The UK Government wants to replicate the EU-negotiated free trade agreements with the North African countries. Asked how much progress there had been in replacing the existing trade agreement with Tunisia, for example, the Government’s answer was not time-specific:
  1. We have been in constant dialogue with all our trading partners to achieve continuity by replicating the effects of our existing EU trade agreements. They understand this must be primary objective, and securing continuity will be a strong foundation to build on our already successful trading relationship.
• UK policy towards the region has been shaped by EU initiatives for the region, such as the European Neighbourhood Policy.
• The outline of the political declaration setting out the framework for the future relationship between the EU and the UK, published in November 2018, suggested that the EU and the UK would coordinate policy where possible.

• As Brexit approaches, and in the wake of the Commonwealth Heads of Government Meeting (CHOGM) in London earlier this year, the question of how the UK will trade with developing countries after Brexit has taken on clear political and economic significance.
• The Prime Ministers subsequent visit to South Africa, Nigeria and Kenya confirmed this.
• The Committees report identifies key areas where action could be taken not only to improve trade links with developing countries, but also to help meet development goals.

Chair's comments

• The extent to which the future UK-EU relationship will leave the UK free to develop and implement its own independent trade policy remains unclear.
• If the Government shows leadership on this issue, this Committee will be the first to praise them for doing so.

Trade between the UK and Commonwealth countries

• The report argues that whilst World Trade Organization rules prevent the granting of non-reciprocal preferences to Commonwealth countries as a group (i.e.
• without granting such preferences to other developing countries), the UK could strengthen the unilateral preferences it grants to developing countries to the mutual benefit of developing countries and the Commonwealth (given that the majority of Commonwealth members are developing countries).

Trade and gender

• The report highlights an explicit connection between trade and gender.
• Practical ways of achieving this would be for the Government to publish an analysis of its understanding of the relationship between trade and gender, and for subsequent trade negotiations to be informed by impact assessments relating to the impact of any agreement on gender inequality.

Increased collaboration with DfID

• Despite the success of initiatives such as Aid for Trade, considerable scope remains for greater alignment of trade and development policy.
• Measures such as additional Aid for Trade funding from the Department for International Trade, the introduction of trade and sustainable development chapters in trade agreements and greater collaboration with UK companies that have developing countries in their supply chains should be considered.

Supporting investment and exports

• The Committee recommends that the Government should encourage investment into developing markets that supports sustainable development, particularly in the area of infrastructure.
• Stronger relationships with investment promotion agencies should be also be established.

Current and future unilateral arrangements

• The Committee welcomes the Governments stated intention to maintain current levels of UK market access to developing countries, under EU unilateral preferential arrangements, post-Brexit.
• The arrangements should however be reviewed in the longer term, and the Government should set a time limit for carrying out such a review.

Reviewing ‘rolled-over’ EU Economic Partnership Agreements

• On Tuesday 20 November, DG Trade of the European Commission and the EEAS will debrief INTA Members on the latest stages of the negotiations with 3 key Latin America trading partners: Chile (one year after the start of the negotiations and in preparation to INTA's delegation), Mexico (following the agreement in principle reached in April) and Mercosur (immediately after the latest negotiating round in Brussels).
• Such discussions will allow INTA Members to assess the progress made so far in the aim to seek convergence with EU's strategic partners.

• Asia-Pacific Economic Cooperation (APEC) CEO Summit in Port Moresby, capital of Papua New Guinea, on Saturday, the Xinhua News Agency reported.
• Chinese and foreign representatives who attended the APEC CEO Summit told the Global Times on Saturday that they were inspired by Xi's speech and countries across the world should strengthen cooperation to pursue inclusive growth through innovation instead of confrontation.
• Xi said that only openness and cooperation can create more opportunities and space for development, Xinhua reported.
• "Confrontation, either in the form of a cold war or trade war, produces no winners," he said.