On February 18, 1989, the Heads of State of five Maghreb countries--Algeria, Libya, Mauritania, Morocco, and Tunisia--met in Marrakech (Morocco) to sign a Treaty establishing the Arab Maghreb Union (AMU). On the economic side, the Treaty aims to integrate the economies of the five countries.
This paper provides an overview of the institutional arrangements and the key issues relating to economic integration in the Maghreb. The paper draws attention to the progress made consonant with the economic objectives of the agreement as well as the problems and obstacles encountered. It also attempts to assess the extent to which the main prerequisites for economic integration are in place in the Maghreb. It does not, however, analyze the potential for trade creation as this would require a study of factor endowments and potential production patterns, which is outside the scope of the paper. Special attention is given to the relationship between the AMU and the European Union (EU), recognizing that the economies of the AMU countries are currently more strongly oriented toward Europe than toward each other, and that the EU may be an important factor in determining the success of Maghreb economic integration.
The paper is divided into seven sections. Section I provides the historical and country perspective to the Union and describes the objectives of the Treaty. Section II reviews the various aspects of the implementation of the Treaty to date. Section III describes the pattern of AMU trade and economic relations during the period 1992-93. Section IV explains the main difficulties confronting economic integration in the Maghreb. Section V covers the main elements of the current debate regarding the strategy of economic integration within the Union, whereas Section VI examines some issues relating to the interrelations between the EU and the AMU. The last section presents the main conclusions of the study. Despite considerable progress, economic integration has remained limited, mainly because of differences in development strategies and economic policies amongst the five countries. For the future, the major challenge is not only to create a convergent economic environment, but also to put in place appropriate mechanisms to increase cooperation without distorting market forces.