Adjusting to New Realities: MENA, The Uruguay Round, and the EU-Mediterranean Initiative

The MENA region, with the exception of the GCC economies, is lagging behind in trade liberalization. This delay has had a negative impact on production efficiency and consumer welfare and will become more costly given the increasing globalization and integration of the world economy. It is likely to reduce the region's attractiveness for foreign investment. The region has yet to take sufficient advantage of the remarkable growth in international trade and risks missing out on the added opportunities presented by the current multilateral trade liberalization arrangements.the Uruguay Round and the European Union Mediterranean Basin Initiative. The paper describes the trade characteristics of the MENA region and considers past and ongoing trade reform in certain countries, including reforms the context of Fund supported adjustment programs. It discusses the advantages of further trade liberalization in achieving higher and sustainable rates of growth and improving the welfare of the region.s population. It considers MENA.s participation in the Uruguay Round and the EU.s Mediterranean Basin Initiative and addresses the opportunities presented by these initiatives. The paper concludes with an overview of measures that MENA countries will need to implement to benefit from these multilateral trade-enhancing initiatives.