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French Version

Beirut begins implementation of EU Association Agreement

Siniora touts pact as boost for reforms

The implementation of the Association Agreement-signed four years ago by the European Union and Lebanon-was announced Monday, and is expected to boost bilateral trade, increase the access of Lebanese exports to Europe, and strengthen institutional and political ties between the two sides.

The agreement will also be a tool to help the country implement urgent social and economic reforms, a senior European Union official said.

"The Association Agreement ... may help Lebanon to implement reforms in such essential fields as justice, human rights, business judicial framework, energy, transport or environment," said the head of the delegation of the European Commission in Lebanon, Patrick Renauld.

On the economic level, the agreement stipulates the gradual establishment of a free trade zone in Lebanon, which would result in the complete removal of Lebanese duties on EU industrial and agricultural imports between 2008 and 2015.

The majority of Lebanon's manufactured and agricultural commodities had already enjoyed free access to EU markets, but the Association Agreement formalizes the arrangement and strengthens institutional ties.

Lebanon's exports to the EU amounted to $212 million in 2005 and around 11 percent of Lebanon's exports go to EU countries, mainly France, Belgium and the United Kingdom, according to Ministry of Trade and Commerce.

Stressing that the EU was not "a charitable organization," Renauld said: "Europe has practical, concrete and immediate interests to promote development and stability for its closer neighbors."

By requiring Lebanese industrialists to maintain high standards of intellectual property rights protection and adopt corporate governance principles, the agreement aims to encourage greater reciprocal market access for goods and services.

"Today and more than ever in its history, Lebanon should define and implement political and economic reforms," Renauld added.

Association of Lebanese Industrialists chief Fadi Abboud said the future of the Lebanese economy was directly linked to a successful partnership with Europe. He added, though, that much more could be done for Lebanon to fully benefit from the agreement.

Abboud criticized the absence of export guarantee schemes with separate EU countries. He also said that since the agreement was signed, there has been a low level of European direct investment in Lebanon and very few joint ventures between European and Lebanese companies. Abboud also faulted the EU for channeling grants to the public rather than private sector.

In addition, he argued that too little attention has been paid to the aspects of the agreement that deal with aligning EU and Lebanese laws pertaining to issues such as human rights, consumer rights, transparency and corporate governance.

The agreement goes beyond commerce by establishing a framework for political dialogue, co-operation in economic policy, and sets out guidelines for drafting community standards to support Lebanon's efforts to achieve sustainable economic growth, according to the EU official website.

Lebanon will start negotiating a five-year Action Plan with the EU on Thursday to establish a framework for implementing the agreement. The progress of the agreement will be regularly monitored by bilateral committees, and the EU will determine the degree of its cooperation with Lebanon and the volume of its financial assistance, Renauld said.

Premier Fouad Siniora said the Action Plan would play a significant role in hastening the country's reform strategy.

"These reforms aim to refocus the role of the state, reemphasize the role of the private sector in the economy and increase economic efficiency and social justice," Siniora said.

He added that Foreign Minister Fawzi Saloukh would head to Luxemburg on April 11 to participate in a meeting between the two parties to the Association Agreement.

Lebanon is currently in the process of accession to the World Trade Organization, where it has had observer status since it applied in 1999. The government will also propose a five-year economic and political reform program before the much-delayed Beirut I Donors' Conference-that is expected to be held in the coming months to assist the country's fragile economy.

A Cabinet session is planned for Wednesday to discuss the reform strategy prepared by the Finance Ministry.

Beirut,04 03 2006
Raed El Rafei
The Daily Star
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