EU looks inwards

If the European Neighborhood Policy ends, Israel will be left in a better position than most.

An announcement by the German government that it would seek to dismantle the European Neighborhood Policy is a milestone in EU foreign policy. The announcement also signifes the different attitudes between the part of the EU that looks south from those that look east, and between those who consider the EU to be basically a European Christian union, without Muslims, and those who see a completely different contemporary European role.

The European Neighborhood Policy was launched two years ago to achieve economic, social, and political integration with countries bordering the EU or close to it: the states of the former USSR to the east, through the Middle East, to North Africa in the south. The foundation of this policy was a simple proposal: these countries will adopt EU standards and laws in many areas and receive access to the EU market in exchange.

Anyone worried by the significance of the policy for Israel can relax. It is doubtful if there was anyone in either Brussels or Jerusalem who knew how Israel was supposed to participate in the neighborhood policy venture. Free trade in goods between Israel and the EU already exists under the association treaty. There are many channels for R&D cooperation: Israeli participation in EU Framework Programmes for R&D, Galileo global satellite navigation system (GNSS), and Eureka Network for Market Oriented R&D.

What interested Israel in the European Neighborhood Policy was the possibility of achieving free trade in services, but for this there is no need of grandiose plans, especially since there is no effective single European market for services anyway. In financial services, in which there is a single European market, Israel has no need to adopt EU regulations. Israeli regulations are stricter than European regulations in a number of areas, such as limiting the market power of banks, so specific arrangements can be reached that will open the market without the need for exhausting negotiations over a meaningless framework.

This conclusions comes with a reservation. It is valid so long as there is a multilateral and global framework for international trade under the World Trade Organization (WTO). If the world moves towards regional trading blocs, and builds walls between them, Israel really will need frameworks like the ones proposed by the European Neighborhood Policy. That is not the case at present. Israel and Europe can get along without a new neighborhood policy, and be satisfied with agreements derived from common interests, such as in R&D, or common values.

The picture is very different for the other countries in the Middle East and North Africa. The European Neighborhood Policy is designed to reduce immigration to Europe from North Africa; a policy to bring in goods and maybe services from neighboring lands, but not people. As for Germany, the challenge is to change the meaning of the border between Central and Eastern Europe, from a border of “up to here” that divides economically and culturally, to a border “from here” that will allow the expansion of Europe eastwards.

The only alternative for halting the tide of immigration from the south would be to revive the Barcelona Process, the multilateral framework between the EU and Mediterranean basin countries for the promotion of trade, culture, politics, the environment, and so on.

The other countries of the Middle East and North Africa felt more comfortable with the Barcelona Process than with the European Neighborhood Policy, which would have made difficult demands not only for regulating markets, but also in the area of civil rights. But the Barcelona Process has existed for 11 years, with few achievements. It is doubtful if Southern Europe has the time to wait for a solution to be found that suits the poor of the Middle East and North Africa. It is also doubtful if France will forego its ambition for political influence in the Middle East and North Africa.

There is an impression that Germany cares for none of this. Someone will yet tell them that, if neither the Barcelona Process of the European Neighborhood Policy exist, the construction of an actual wall will then be on the agenda. In other words, if the proposal of German Chancellor Angela Merkel is accepted, Europe will have no choice but to build physical obstacles against the Middle East and North Africa.

Published by Globes [online], Israel business news - www.globes.co.il - on July 19, 2006

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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