Textile and automotive: key for a broader cooperation

Between Morocco, Tunisia, Egypt and Jordan, free trade accords were originally based on the textile and automotive industries. These two strategic sectors aim at developing south-south and south-north commerce.

Julien Théron - Eurojar

“The two sectors are key sectors for each one of the four countries concerned by Agadir agreement. They provide considerable employment opportunities and are strategically important in terms of industrial activity and exports”. With these words, Jean-Francois Limantour, advisor at Agadir technical unit, justifies the choice of the textile and automotive sectors, as the main industrial fields addressed by the agreement. leather and transport sectors would be next fields targeted by the agreement.

A difficult kick off
Launched in 2007, Agadir agreement started to be implemented at a slow pace. “To date, exchange and cooperation among the four countries are weak,” explains Limantour, also president of the Euro-Mediterranean Circle of Clothing-Textile Managers. “There are different reasons for that, but the main one could be that the agreement just started to be implemented. Moreover, several years were needed to put into effect new custom regulations.”

It is a fact, trade executives in the 4 member countries were, in most cases, unaware of the advantages and trade opportunities offered by this agreement. Some leaders in the textile sector for example, were totally in the dark concerning the agreement. Franck Zagury manages Alliance Textile, a clothing company, part of the Moroccan Association of Textile and Apparel Industries (AMITH). He underlines that although he is in close contact with the Moroccan economic authorities, he did not get any information about the subject.

However, potentials are there, because transnational sectoral synergies are not yet common. The reason, according to Zagury, “is not customs. Industrialists from Agadir countries do not venture in Morocco, and I do not seek to go to them.”

Clearly interested by the cotton production in Egypt, Zagury welcomes well the idea of cooperation: “All opportunities are open; the important thing is to function in a cooperative way.” At the same time, he seems to have some worries, as the four sides do not share the same views, do not have the same imperatives and needs.”

Concurrence between the countries involved in the agreement seems to be the main reason hindering the progress of economic cooperation in the south Mediterranean. “Each one of these countries is governed by strong nationalism, explains Jean-Francois Limantour, this means that each country considers itself better than the other country, and thus they are all strong concurrent to each others. They do not seem to be naturally willing to cooperate.”

Priority to communication
Bruno de Cenival, from BdC Conseil Company and author of the report on automotives, confesses:”Politicians were aware of the issue, but industrialists were rather kept in the dark. However, with the conferences organized and the reports diffused, they became more aware of the details of the agreement. But, are they truly aware of its benefits? Most probably, it is not the case…”

Jean-Francois Limantour shares the same opinion:”Trade leaders might be more interested in cooperating than politicians, as far as they assimilate the benefits of cooperation and of complementing the work of each other. The same politicians who take the decision to venture in this agreement, or their successors, are holding back the development of the strategy.”

In an effort to fight these reserves, priority is given to pedagogy, because, according to Cenival, what mostly interests private partners, who are the first potential beneficiaries of the agreement, is a structured and planned opening up. “They are looking forward to collect every source of information; they welcome any support (if they need it) and all sort of encouragement, whether it is methodological or financial,” he insists.

Each one of these countries has, in fact, established special relations with Europe. Morocco and Tunisia were spearheading the initiative, while Egypt and Jordan, in the textile field were rather interested in the American market, as they benefited from preferential accords with the USA. However, Egyptians and Jordanians embarked in bridge-building efforts with the European Union. Thus, obstacles seem to be gradually fading out in the south Mediterranean and the initiative well developing.

Bruno de Cenival considers that the impact of the agreement is showing, as people are more and more talking about possible cooperation. On the industrial level, industrialists are looking for partners to complement and support their work, instead of being in pure concurrence with a common partner that is Europe.”

A global initiative
The concurrence within or between regional integrated or non-integrated blocs is today far more important than what is happening on the level of national economies. The automotive sector, for example, became a new opportunity for economic actors in the south Mediterranean, as they have moved “in a time frame of 5 to 10 years, from the position of local traders to that of industrialists launching policies and mapping the future.” It is an interesting position, but Asian concurrence became a reality that necessitates larger strategies, or even more than a national economic strategy.

For the textile sector, things are equally imperious, as China represents a clearly more ferocious danger. To the question “Would Agadir agreement suffice to face China?” Limantour answers clearly “no, it is indeed a sine qua non condition, but not sufficient by itself.”

Agadir agreement does not seem to constitute the first step of an economic union as is the case in the European world. More, it is not a sufficient arm to face economic giants. Yet, global concurrence is a fact, and the south-south opening up is working on the reinforcement of capacities and competitiveness, as long as actors play their role in this regard. Moreover, with the “very strong” Euromed dimension, according to Limantour, Agadir agreement could help in the reinforcement of the strategic partnership between the north and the south of the Mediterranean.