ARAB MAGHREB UNION

The Arab Maghreb Union (AMU) is a proposed economic integration of the five North African countries—Algeria, Libya, Mauritania, Morocco, and Tunisia—which make up the Maghreb, the Arabic term for the western region of the Arab world. Collectively, the Maghreb countries have a gross domestic product of $300 billion, based on mid-1990s figures, which is similar in size to the economies of Argentina and Pakistan. As a whole, however, the Maghreb is quite poor on a per capita basis, as GDP amounts to only $4,000 per each of the region's 80 million persons, a level comparable to that of Lithuania.

The plan for a common market by 2000 was set forth in a treaty of the five nations establishing the trading bloc in 1989. The Maghreb common market was to be modeled somewhat after the European Union's common market, as the AMU treaty was similar to the European Economic Community Treaty of 1957.

Progress toward establishing the Maghreb common market, however, has been much slower than anticipated. Although the first half of the 1990s saw 26 cooperative agreements in such areas as taxation, customs, and central banking, by the mid-1990s the process was far behind schedule. Despite the cultural unity of the Maghreb, which is predominantly Arabic-speaking and Muslim, with a shared historical sense of identity, there have been economic and political obstacles to integration. At the ten-year anniversary of the treaty's signing, there were serious questions about the AMU's future.

DEVELOPMENT

The idea of Maghreb integration has existed since Morocco and Tunisia gained independence from France in the 1950s. However, what was foreseen was a political union, and little attention was paid to economics. Political differences and international disputes kept the Maghreb countries from even normalizing their relations until 1988. It was only in that year that the region's two largest nations, Morocco and Algeria, established diplomatic relations after decades of conflict over the former Spanish Sahara (Western Sahara). Relations between Tunisia and Libya also improved in 1988.

The primary impetus for establishing the AMU, which is both a political and economic regional organization, was the threat of being cut off from the Maghreb's major trading partners in Europe as European economic integration advanced. At the time almost two-thirds of the Maghreb countries' international trade was with countries of what was then called the European Economic Community (EEC), whereas less than 3 percent was between each other. The leaders of the Maghreb countries realized that the vast inter-Maghreb trade potential was not being realized, especially considering the complementary natural resources and pools of labor of the countries of the Maghreb. Although less economic dependence on Europe was one goal, at the same time it was hoped that the AMU could serve as a negotiating block to achieve better, closer ties with unified western Europe.

Another reason for seeking economic integration was that the individual Maghreb countries were suffering at the time from economic crises of their own, which could be overcome only through integration. The oil-producing countries Libya and Algeria had become too dependent on revenues from oil exports which had declined due to falling prices. Tunisia and Morocco were undergoing economic restructuring which was having ill short-term effects, and Mauritania was suffering from a stagnant economy and high foreign debt.

PROPOSED MEASURES

The ultimate economic goals of a common market include the adoption of common customs legislation, common financial legislation, and a degree of coordinated economic planning. For the AMU, common customs legislation would involve the removal of internal customs duties and the imposition of a common customs tariff for goods from countries outside the union. Common financial legislation would involve creating

1. a Maghrebi Financial Zone;
2. a Maghreb currency;
3. an independent Maghrebi Fund for Development to coordinate investment and float loans; and
4. a regional budget to fund certain projects, which would be financed through a regional tax.

Coordinated economic planning among the members would include public spending, tax legislation, investments, job opportunities, and import-export policies, within a liberal economic framework in which the state would play a lesser role. To these ends, the countries have so far only undertaken feasibility studies. The Arab Maghreb Union had decided at its July 1990 summit session to implement the customs union by 1995, and it determined that Tunis would be the seat of an investment and foreign trade bank.

Initial steps toward a common market have included a freer flow of goods and individuals among the five countries. Visas are no longer required for travel of member nationals, and plans have been made for a common identity card. General agreements have been reached on the integration of transportation and improvements on a railway between Tunis, Tunisia, and Marrakech, Morocco, have begun. Construction has begun on a pipeline from Algeria via Morocco to transport gas to Europe. Other issues that have been discussed include a joint airline, joint agricultural and industrial projects, and intra-Maghreb road improvements. However, greater headway in other spheres, such as standardizing exchange rates and the complete freedom of movement of capital and goods, is still needed.

POLITICAL DIFFERENCES STALL
PROGRESS

While the AMU has existed for more than a decade on paper and as an intergovernmental institution based in Rabat, Morocco, its most important functions have never come to fruition because of deep political rivalries in the region, particularly between Algeria and Morocco, the two largest members. A host of long-standing political issues and mistrust, including the territorial dispute over the Western Sahara, have colored the negotiations and curtailed progress toward integration since the mid-1990s.

Even though there is apparent widespread popular support for the AMU throughout the five member states, the governments have continued to wrangle and stall. Libya, for example, protested the other Maghreb countries' lack of support for its stand-off with the United States and Britain over allegations that it was harboring terrorists. Algeria, for its part, has been caught up for decades in the tumult of a civil war between Islamic fundamentalists and advocates of secular government.

Furthermore, economic integration has been hindered by the differing economic structures of the member countries. While Morocco and Tunisia have somewhat more liberal market-oriented economies, Algeria and Libya's economies are quite centrally controlled. Mauritania's economy, the smallest and poorest of the five, is still largely based on subsistence agriculture, and its gross domestic product in 1995 was only $2.8 billion, compared to a range of $35 billion to $116 billion among the other Maghreb countries.

In spite of all the obstacles and setbacks, leaders of the Maghreb countries, as well as many private citizens and business executives, continue to hold out hope that the Arab Maghreb Union will someday blossom. At the tenth anniversary of the 1989 treaty, leaders of both Algeria and Morocco expressed strong commitments to making AMU a reality.