Effects of the Euro-Mediterranean partnership on the olive oil sector

Olive oil represents one of the strategic products of the Euromediterranean region. The association agreements between the European Union (EU) and the Southern Mediterranean Countries (SMC) regulate this market. The trade policies resulting from these agreements seem to be not in tune with the stated intent of gobalisation and free trade and indeed, they highlight the predominant protectionist attitude of the European market, thereby reducing the comparative advantages of the SMC and limiting the scope of the association agreements. The constant market share method applied in this paper demonstrates that in Tunisia, the olive oil sector has slightly improved in terms of competitiveness with the world market. However, the resulting trade creation tends to be more concentrated outside the EU. Consequently, the favourable effects of preferential trade become questionable. Therefore, we wonder whether Tunisian olive oil exports could benefit more from free trade on a non-discriminatory basis than from the mere quota increase.