In 2021, the OECD published its first report monitoring regional integration in the Euro-Mediterranean region. This second edition of Regional Integration in the Union for the Mediterranean assesses progress made since 2021 - a period marked by the impacts of the COVID-19 pandemic, successive economic shocks, ongoing conflicts in the Middle East, and an increasingly complex geopolitical context. In this challenging environment, our report highlights the opportunities that economic integration offers for countries in the region to achieve stability, peace and prosperity.
The report highlights the OECD’s evidence-based analysis on the benefits of economic integration. Manufactured goods now account for a growing share of EU imports from members of the Union for the Mediterranean, exceeding 60% in 2023, with an upward trend in trade in value-added sectors. Further, the economies of the Union for the Mediterranean are building stronger intra-regional trade links and increasingly using inputs sourced from within the region in their exported products. These links foster the development of regional value chains, support quality job creation, and help build economic resilience.
Our study identifies the main opportunities to further accelerate integration progress in the region and provides governments with practical policy recommendations.
Connectivity infrastructure is key to expand trade and investment, and boost skills development in the Union for the Mediterranean. Cross-border transport and energy projects such as the Adriatic-Ionian Motorway and the Euro-Africa Interconnector facilitate travel within the region, support the development of integrated energy markets, help lower the costs of developing infrastructure and attract public and private investments. However, regulatory fragmentation and difficulties in mobilising sufficient investment capital continue to limit infrastructure development, dampen the performance of logistic systems and weaken trade potential. The report recommends a wider use of financial tools such as offtake agreements, equity investments and blended finance to attract private sector investment in infrastructure, helping increase the sustainability of such projects. Strengthening public-private partnerships and ensuring regulatory stability can further mitigate investment risks and support sustainable, cross-border infrastructure development.
The Union for Mediterranean is home to massive human capital potential. Annual migration from the Union for the Mediterranean to the countries that are members of both the Union for the Mediterranean and the OECD (European Union Member States, Türkiye and Israel) increased from around 1.2 million in 2010 to 2.1 million in 2022. Well-managed migration can strengthen regional integration and generate income, supporting higher standards of living for migrants, their countries of origin and the destination countries. Our report recommends prioritising mutually beneficial partnerships and agreements that respond to the needs of origin and destination countries by tackling high unemployment, skills mismatches and intra-regional income level differences. The European Union’s Talent Partnerships with Egypt, Morocco and Tunisia facilitate the alignment of foreign skills development with domestic labour market requirements by reinforcing cooperation between European Union Member States and partner countries, while providing mobility, employment and skills training opportunities for non-European Union nationals. The European Union’s forthcoming Talent Pool, aimed at facilitating the recruitment of non-European Union nationals by employers in the European Union, will provide further impetus to these efforts once adopted.
This second edition highlights that advancing economic integration in the Union for the Mediterranean region can benefit from renewed ambition and policy action. The OECD will continue to support these efforts with evidence-based analysis and policy best practices, and by fostering regional policy dialogue, in partnership with the Union for the Mediterranean and the European Union, towards a prosperous and sustainable future for the region.
Mathias Cormann
Secretary General, OECD