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DG EXPO/B/PolDep/Note/2011_152 October/2011

EN

DIRECTORATE-GENERAL FOR EXTERNAL POLICIES OF THE UNIONPOLICY DEPARTMENT

Tunisia

COUNTRY BRIEFING

ON THE EVE OF THE OCTOBER 2011 ELECTIONS

Abstract

The forthcoming elections of the Constituent Assembly in Tunisia will be the first time the Tunisian people can freely express their opinion on the future political system and the socio-economic orientation of their country. It will also be the first test of the democratic transition process of the Arab Spring towards the establishment of structuresaccountable to electors. Moreover, it will be an interesting test case for an Islamist party to participate in democratic elections. The European Union has invested heavily in securing a free and fair electoral process in Tunisia. The recently established joint EU-Tunisia Task Force is a tangible example of the deep commitment of the European Union in doing its utmost that Tunisia becomes a beacon of its newly strengthened policy in the Southern Neighbourhood. After the elections, the new government will be faced with the challenge of tackling urgently socio-economic difficulties with the help of the EU and other partners.

Policy Department DG External Policies

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This Country Briefing was requested by the European Parliament's Election Observation Unit

AUTHOR:

Pekka HAKALA and Dominique DELAUNAY (economic situation)Directorate-General for External Policies of the UnionPolicy DepartmentWIB 06 M 06M 073rue Wiertz 60B-1047 Brussels

Feedback to [email protected] is welcome

LINGUISTIC VERSIONS

Original: EN, Translation(s): FR

ABOUT THE EDITOR

Manuscript completed on 4 October 2011.© European Parliament, [2011]Printed in [Belgium]

This Country Briefing is available on the Intranet of the Policy Department of the Directorate-General for External Policies of the Union: Regions and countries or Policy Areas

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DISCLAIMER

Any opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament.

Reproduction and translation, except for commercial purposes, are authorised, provided the source is acknowledged and provided the publisher is given prior notice and supplied with a copy of the publication.

Country Briefing: Tunisia on the Eve of the October 2011 Elections

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TABLE OF CONTENTS

TABLE OF CONTENTS 3

1 MAP 4

2 REGIONAL AND DOMESTIC CONTEXT 5

3 TIMELINE OF THE TUNISIAN UPRISING 6

4 LEGAL AND ADMINISTRATIVE FRAMEWORK OF THE ELECTIONS 74.1 LEGAL BASE AND POLITICAL AGREEMENT 7

4.2 ELECTORAL SYSTEM 8

4.3 ELECTORAL CALENDAR 9

4.4 ORGANISATION OF THE ELECTIONS 10

5 POLITICAL LANDSCAPE 115.1 MAIN POLITICAL PARTIES 11

5.2 OUTLOOK ON THE RESULTS 12

6 MAIN ECONOMIC INDICATORS 13

7 ECONOMIC AND SOCIAL CRISIS 147.1 IMPACT ON TOURISM 15

8 INTERNATIONAL TRADE INDICATORS 15

9 TUNISIA’S TRADE WITH THE EUROPEAN UNION 169.1 THE EU-TUNISIA ASSOCIATION AGREEMENT 17

9.2 WEAKNESS OF INTRA-REGIONAL TRADE 18

9.3 CUMULATION OF THE RULES OF ORIGIN AMONG THE MEDITERRANEAN COUNTRIES 18

9.4 EUROPEAN NEIGHBOURHOOD POLICY AND FINANCIAL ASSISTANCE 18

10 RELATIONS WITH THE EU 19

SOURCES 21


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1 MAP

Source: http://www.nationsonline.org/oneworld/map/tunisia-administrative-map.htm


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2 REGIONAL AND DOMESTIC CONTEXT

The forthcoming elections of the Constituent Assembly in Tunisia are pivotal for a variety of reasons. Firstly, it will be the first time the Tunisian people who are hungry for change can freely express theiropinion on the future political system and the socio-economic orientation of their country. Secondly, it will be the first test of the democratic transition process of the Arab Spring where we gradually move from revolutionary abolition of old authoritarian and corrupt structures towards the establishment of democratic structures. Soundly and transparently administered and open elections in Tunisia can have a salutary and encouraging impact on Egypt getting ready to go to polls a month later and in the whole Arab world. Thirdly, it will be an interesting test case for an Islamist party, moderate at least in appearance to participate in democratic elections after having been banned for a lengthy period of time. Finally, the elections will be a major milestone for the European Union which along other major international actors has invested heavily in securing a free and fair process in a country just outside its door. The recently established joint EU-Tunisia Task Force is a tangible example of the deep commitment of the European Union in securing that Tunisia becomes a beacon of its newly strengthened approach in the Southern Neighbourhood. Elections falling short of democratic standards would represent a missed opportunity of historic proportions for the Tunisian people and its supporters and embolden those sceptics who argue that democracy is unsustainable in the Arab world.

When reflecting on the steps taken in the past nine months and the size of the challenges ahead, one has to keep in mind that before the popular uprising that in Europe came to be known as the Jasmine Revolution, Tunisia had an autocratic and repressive political system. Its president, Zine El-Abidine Ben Ali had been re-elected in 2009 for a fifth consecutive term and his party Constitutional Democratic Rally held an unchallenged position in the National Assembly. Opposition, apart from some political parties willing to abide by the rules set by the regime, was relentlessly crushed or forced into exile. Freedoms of association and of the media were severely restricted. In 2010 the country’s political rights rating1 was the same as those for Sudan and Chad. Its civil liberties ranking was no better, placing it alongside Tajikistan and Vietnam. Tunisia’s standing in Freedom of the Press, which analyses the freedom of the print and broadcast media, was at the level of the notoriously repressive regimes of Equatorial Guinea and Syria, placing it on the 184th position amongst 196 countries. The prerevolutionary Tunisian regime also ensured that politically relevant expression on the internet was under its watching eye. In Freedom on the Net, Freedom House’s international assessment of the modern means of communication, Tunisia ranked among the most repressive political systems.

But an economic discontent and quest for freedom was boiling under the calm-appearing surface. Nepotism was characteristic for the political and economic establishment intermingled and securely under control of the Ben Ali and Trabelsi2 clans busy securing profits to their elites and benefits to the adherents. At the same time when the highest strata of the regime were enjoying lavish lifestyles roughly speaking a quarter of the population was unemployed with the young people, increasingly well-educated and cyber-literate was deprived of any prospect of becoming masters of their own future.

The EU and other western democracies were happy to tolerate these shortcomings as Tunisia was regarded as an important ally in the fight against Islamist militancy and as a bastion of neo-liberal economy and secular social model in the Arab world. The very same traditional allies of Tunisia have competed with one another in making up for the initial sluggishness in demonstrating support to the

1 Freedom in the world, http://www.freedomhouse.org2 Family name of the President’s spouse


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revolutionary cause by mounting a support system to the Tunisian efforts in constructing a new edifice for Tunisians.

Tunisia is in many ways unique in comparison with its neighbours: its territory is smaller and more manageable, its population relatively homogenous in religious and ethnic terms, its economy is liberalised and its middle class is large and educated. Moreover, the country’s history is marked by decisions to encourage women’s socio-economic freedoms3. Contrary to the apparently prosperous urban centres and the coastal areas frequented by tourists, the rural areas and the interior of the country are dispossessed. The anti-government demonstrations originated in these under-developed areas with aggravated labour and economic situations.

In conclusion, one needs a plenty of work, conviction and perseverance to build a democracy in Tunisiabut it is worth the investment. The dictator was ousted in a spontaneous popular uprising but the forthcoming elections are the first episode in the consolidation of the objectives of the revolution via the institutionalisation of democratic standards, accountable government and principles of open society as well as finding commonly agreed policies to tackle existing inequalities in Tunisian society.

3 TIMELINE OF THE TUNISIAN UPRISING

The events evolved rapidly in the early weeks of the popular uprising and the old system scrambled when the President left the country.

3 Tunisia bans polygamy; women serve in a variety of professions and constitute more than half of university students. Tunisia’s personal status code is credited on President Bourguiba but during the stagnation of the Ben Ali era, Morocco took important steps forward and left Tunisia behind e.g. in terms of women’s inheritance rights.


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Nine months into Tunisia’s revolution, the country still faces important challenges. Many important reforms have been undertaken by the cabinet of Beji Caïd al-Sebsi4 and the "High Authority" under the leadership of Yadh Ben Achour5: release of political prisoners, authorisation of a plethora of political parties and lifting of media and internet restrictions. The former ruling party RCD has been dissolved and a number of former party officials have been arrested and tried. The former President and his spouse themselves were tried and sentenced in absentia. The interim authorities have adhered to major international human rights instruments, e.g. the Rome Statute of the International Criminal Court.

However, the public has shown a growing degree of impatience and dissatisfaction with the transition process accusing the transitional leaders of reforming too slowly. Moreover, there seems to be a lack of clarity who within the government is entitled to take key decisions, and in some cases officials in the administration have been reported of hindering the implementation of decisions taken by the new regime. The tensions between the coastal elites, relatively well off and secularised and the poorerpopulations in the economically stagnated interior, socially deprived and with more traditionalist values are multiplying.

Continued public unrest, albeit less frequent than in the early months of 2011, has also raised security concerns. In July PM al-Sebsi accused rioters in Sidi Bouzid of seeking to destabilise the country and ruin elections. In early September, he stated that his government would “no longer tolerate practices that risk paralysing the daily situation of Tunisians”.

4 LEGAL AND ADMINISTRATIVE FRAMEWORK OF THE ELECTIONS

4.1 Legal base and political agreement

The legal bases of the elections are the legislative decrees n° 35 of 10 May 2011 on the election of a National Constituent Assembly6 and n° 27 of 18 April 2011 establishing the higher electoral commission7.

On 23 October, people of Tunisia will elect a National Constituent Assembly consisting of 218 members who will have the task of drafting a new constitution to replace the current one from 1959 and to be in due course submitted to a referendum. The constitution will define the functioning of and the division of powers between the state institutions as well as the liberties, rights and obligations of citizens. It will also designate a transitional government to take care of the running affairs of the state and to organise parliamentary (and presidential, if the Assembly decides for a semi-presidential or presidential political system) elections.

Beyond the legal framework, the main political parties have agreed8 on the limitation of the duration of the Constituent Assembly to one year, which means that parliamentary and most likely presidential elections, too, will be held in 2012 preceded by a referendum on the new Constitution as mentioned before.

4 Essebsi is an alternative spelling of the full name of the PM الباجي قائد السبسي5 Haute instance pour la réalisation des objectifs de la révolution, de la réforme politique et de la transition démocratique

یاسيالھیئة العلیا لتحقیق أھداف الثورة واالصالح الس واالنتقال الدیمقراطي6 Décret-loi n° 35 du 10 mai 2011 organisant les élections pour une assemblée constituante7 Décret-loi n° 27 du 18 avril 2011 portant création d’une instance supérieure indépendante pour les élections8 Political parties signed a road map of the Transition Process on 15 September 2011


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4.2 Electoral system

For the elections the country is divided into 27 constituencies that follow the boundaries of governorates except in the cases of Tunis, Naboul and Sfax which have been split into two constituencies due to their size. Given that there are approximately one million Tunisians residing abroad, six constituencies have been formed for the expatriate voters with the biggest two in France with 10 seats in total.

List of constituencies and the number of seats allocated in each of them

Ariana 8 Sfax I 7

Béja 6 Sfax II 9

Bizerte 9 Sidi Bouzid 8

Ben Arous 10 Siliana 6

Gabès 7 Sousse 10

Gafsa 7 Tataouine 4

Jendouba 8 Tozeur 4

Kairouan 9 Tunis I 9

Le Kef 6 Tunis II 8

Kasserine 8 Zaghouan 8

Kébili 5 Northern France (Paris)

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Mahdia 8 Southern France (Marseille)

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La Manouba 7 Germany (Berlin) 1

Médenine 9 Italy (Rome) 3

Monastir 9 Rest of Europe and Americas (Montréal)

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Nabeul I 7 Arab World and the rest of the world (Abu Dhabi)

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Nabeul II 6

TOTAL 218

The elections use a proportional list system (Articles 31-36 of Decree 35-2011)of allocating seats. In each constituency votes each list has gained are counted. The number of votes cast is divided by the number of seats at stake to establish the “price” of a single seat9. Each list is allocated the number of seats it is entitled to. The remaining seat(s) in the constituency is/are allocated to the list(s) in the order

9 In the single-seat constituency in Germany one effectively uses a majority voting system and a further one has two seats and two have three seats at stake raising the effective threshold.


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of the biggest remainder of left-over votes after the initial distribution of seats, e.g. if a given imaginary constituency has the right to elect 8 seats in the Assembly and 240,000 votes are cast, the price of a single seat is 30,000 votes.

N° of votes (1,000)

Initial allocation of

seats

Remainder Final allocation of seats

List A 82 2 22 3

List B 56 1 26 2

List C 32 1 2 1

List D 30 1 0 1

List E 18 0 18 1

List F 16 0 16 0

List G 6 0 6 0

Total 240 5 8

The provisions include a parity reservation for women: on each list every second candidate has to be a woman. However, in all 33 constituencies only 5% of the lists are led by a woman. Due to this and the fragmentation of the political party landscape, the representation of women in the Constituent Assembly risks to be well below 50%.

1635 lists and more than 10,000 candidates10 have been registered. 220 lists have been rejected and 130of them have appealed on the rejection to a court. Of the 1425 admissible lists 45% are composed of independent candidates. The constituencies outside Tunisia will have 146 lists bringing the total number of lists to 1561 in the 33 constituencies.

4.3 Electoral calendar

27 July – 19 September Registration of electoral observers

15 August Deadline for the registration of voters 55% of eligible voters registered amounting to 3.9 million)

20 August Closure of registration of lists of candidates

4-20 September Second round of registration of voters some 100,000 additional registrations

12 October End of exceptional registration of new military and security personnel, 18 year olds since the end of ordinary registration

15 October Announcement of the polling stations

10 Age limit 23 years


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28 September - 19 October

Election campaign abroad

1-21 October Election campaign inside Tunisia

20-22 October Voting in the six constituencies abroad

23 October Voting inside Tunisia 7 a.m.-7 p.m. registered voters and those in possession of a national identity card can vote

4.4 Organisation of the elections

The Independent Election Commission (ISIE) is the lead electoral organiser and manager. Many other authorities and ministries are involved in the decision-making process. The Commission had the task to check the lists to disqualify all persons who held positions in the former ruling party (article 15 of Decree 2011-35). There is a media-monitoring unit within the Commission and mechanisms have been put in place to resolve problems related to the registration of voters.

Despite the Commission’s hard work, a plenty of tasks remain to be executed. The electoral lists have not yet been established and the polling stations, expected to be around 7-8,000 have not yet been defined as the voting of the non-registered voters has not been fixed. It will also have to decide on a system to manage election results in an efficient and transparent way.

The accreditation of domestic and international observers is also a responsibility of the Electoral Commission. After European Union Election Observation Mission the biggest international observer organisation is the Carter Center. Other major observer organisations include Association Tunisienne pour l’Intégrité et la Démocratie des Elections (ATIDE), Mouraquiboun ) OFIYA ,(المراقبون) أوفیاء : coalition of more than 70 Tunisian NGOs) and International Republican Institute.

EOM in a nutshell

Chief observer Michael Gahler MEP

Management team 10

54 long-termObservers

66 short-term

Origin of observers 26 Member States, Switzerland and Canada

EU Diplomats posted in Tunis 20

EP Observer delegation chair Gabriele Albertini MEP

EP Observer delegation 15

Total size of the EOM 165 observers


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5 POLITICAL LANDSCAPE

The Tunisian political parties entered the revolutionary scene relatively late and none of them can claim to be the owner of the revolution. The political scene has been marked by a struggle to resolve differences of opinion over reform priorities. The main Islamist party, Hizb al-Nahda, for one, withdrew in June from the High Authority for the Realisation of the Goals of the Revolution, Political Reforms and the Democratic Transition. Many other parties also criticised the lack of legitimacy of this organ thus undermining the authority of the interim government.

The political party landscape in Tunisia is extremely fragmented and it is likely that only a handful of the more than 100 legalised parties will manage to get seats in the Constituent Assembly11.

General Union of Tunisian Workers (UGTT) established in mid-1940s, the main trade union federation is an important political player in Tunisia. It organised protests in the mining region of Gafsa in 2008 and 2010 as a prelude to the uprising of the uprising early this year. In the uprising itself it played an extremely important role in the more remote regions by organising strikes. It claims more than 500,000 members but is fragmented and has suffered from the formation of splinter movements in the past few months.

In late August the Union reached an agreement among the committee members allowing them to decide freely whether or not they wish to run for the elections of the Constituent Assembly. It is likely that UGTT will focus on more social issues in the imminent future. On 22 September, UGTT called on its regional and sector-based union structures to avoid strikes and sit-ins from now on to the end of the elections.

5.1 Main political parties

Hizb al-Nahda12 – Rachid Ghannouchi

Tunisia’s largest Islamist organisation operated clandestinely and was led from exile over the past two decades13. It did not play a significant role in the public uprising. However, it had an existing power base and recent public opinion surveys place the public support it enjoys between 18 and 25%. The leader of the party has portrayed himself as a moderate Islamist14 leader who is committed to democratic political system and supports the separation of politics and religion and insists that if his party wins it will respect equal rights for men and women and maintain a division between Islam and the state.

Progressive Democratic Party – Najib Chebbi

The secular left-leaning, main opposition party under the previous regime appears to be the secondlargest political force. PDP expresses diverse political and ideological and includes both liberals and "progressives Islamists gathered around a single project alternative government." the platform of the party is composed of: political reform including a general amnesty to prisoners of conscience and dissidents in exiles, the neutrality of the administration, free information, a constitution that guarantees freedoms of individuals, the separation of powers and the independence of the judiciary, laws guaranteeing freedom of association and expression, etc. of economic and social reforms based on the

11 For a list of political parties authorised after the revolution see http://fr.wikipedia.org/wiki/Partis_politiques_tunisiens12 Alternative transliteration of Ennahda or an-Nahda النھضة13 See Rajaa Basly: The Future of al-Nahda in Tunisia, Carnegie Endowment, 20 April 2011 for more details.14 He has compared his party on many occasions to Turkey’s ruling AKP. He has stated he would step down from the chairmanship of the party before the end of the year.


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introduction of the principles of transparency in business and good governance (to revitalize employment) and a fair distribution of wealth.

Ettakatol التكتل alias Democratic Forum of Labour and Liberties (FDLT).– Mustafa Ben Jaafar

The centre-left coalition is led by Dr Mustapha Ben Jaafar is a founding member of the Movement of Socialist Democrats (MDS). Founder and former Secretary General of the Union of university hospital doctors affiliated with the General Union of Tunisian Workers (UGTT) former Vice President of the Tunisian League of Human Rights (LTDH), and also a founding member of the Council National Liberties in Tunisia (CNLT).

The main demands of the Forum are cleansing of political climate, revision of legislation, the separation of the parties and state institutions, organization of free elections, rebalancing of powers, exercise of fundamental freedoms and respect for human rights.

Ettajdid التجدید – Ahmed Ibrahim

Ettajdid is in coalition of other leftist parties and political associations, some of whose members were harassed and jailed by Ben Ali, with some of their leaders in exile.

Congress for the Republic – Moncef Marzuki

The party formed by the renowned human rights activist is a platform fighting for rule of law and human rights. In its founding declaration, the CPR's goal is the establishment "for the first time in Tunisia" a republican regime guaranteeing freedom of expression, association and demonstration, and the holding of free, fair and guaranteed by national and international observers. The CPR also calls for a new constitution establishing a strict separation of executive, legislature and judiciary powers, respect for human rights and gender equality. In addition, the RPC calls to a "renegotiation" of the Tunisian commitment to the European Union

Tunisian Communist Workers’ Party (PCOT) – Hamma Hammami

Parti communiste des ouvriers de Tunisie is a Marxist-Leninist, outright left-wing political party which was outlawed until the revolution.

Patriotic Free Union (UPL) – Slim Riahi

The centrist party UPL stresses creation of employment, development of regions, and defence of fundamental freedoms and rule of law.

Afek Tounes أفاق تونس – Mohammed Louzir

Afek Tounes is a liberal party advocating devolution of powers to regions, market economy and promotion of enterpreneurship

5.2 Outlook on the results

A recent opinion poll carried out by Tunisia’s Observatory of the Democratic Transition and published in al-Maghreb newspaper in late September confirms that al-Nahda has the strongest popular support. Around one-quarter of respondents (26%) have no intention to vote. This is a significant proof that there is a sizeable proportion of Tunisians who feel that none of the dozens of political parties formed after the revolution are in a position to represent them. Below are the predicted shares of votes per major political party in detail:


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Hizb al-Nahda 25%

Progressive Democratic Party (PDP) 16%

Democratic Forum for Labor and Liberties (FTDL or Ettakatol)

14%

Congress Party for the Republic (CPR) 8%

Afek Tounes 3%

Former Constitutional Democratic Rally (RCD) parties (e.g. L’Initiative and al-Watan)

9%

Tunisian Workers' Communist Party (PCOT) 3%

Undecided 21%

When being asked which political currents they would like to see represented and whether they are sure about their choice, 35% of the polled people responded that they intend to vote for independents, 29% plan to vote for Islamists, and 9% for Liberals. Approximately one-third (31%) of the respondents decided to vote for an independent candidate, but almost half of them (44%) stated that they might change their mind, and 21% did not state their voting preference.

When being asked to which extent they are optimistic regarding Tunisia’s democratic transition, a majority of respondents expressed optimism: 20% were very optimistic and 35% relatively optimistic, while 44% stated that they were pessimistic.

The vast variety of political parties and a large number of independent candidates make it difficult to make predictions on the distribution of seats and the political balance of power within the assembly. The largest parties will score more seats than their proportion of votes cast given that the number of seats per constituency varies between 1 and 10.

6 MAIN ECONOMIC INDICATORS

Area 163 000 km2

Population 10.5 million

GDP EUR 31.2 billion

GDP per capita EUR 2,990

Growth rate 3.1%

Inflation rate 3.5%

Unemployment rate 14.2%

GDP by sector:Agriculture 10.2%

Industry 36.0%


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Services 54.0%

Active population by sector:Agriculture 18.5%

Industry 32.5%

Services 49.0%

Up until 2008 Tunisia was recording good economic performance: the rate of growth in GDP was 4.6% in 2008 as opposed to 6.3% in 2007. Activity grew by 8% in market services and by 2.7% in industry but fell by 0.7% in agriculture. Unemployment remains high, at 14.2% of the active population of more than 3.6 million. It is even higher among young graduates.

The country’s sustained growth over a number of years, along with a skilled and relatively low-cost labour force and good quality infrastructure makes Tunisia one of the most developed countries of the Mediterranean. This economic performance is reflected in an evaluation of Tunisia according to its international indicators:

Ease of doing business (World Bank): 73rd position

Corruption perception index (Transparency): 65th position

Country risk (Standard and Poor's): ‘BBB and stable’

Tunisia is, however, faced with the problem of a shortage of water for its crops, which is why it has launched a 10-year plan to save water.

7 ECONOMIC AND SOCIAL CRISIS

Five months after the revolution of January 2011, the economic and social crisis in Tunisia reached even a lower level. It is characterized by slowing of the productivity, job cuts, rising unemployment rates, the withdrawal of investors, the collapse of tourism and the growth of public deficit.

The socio-economic indicators in the first quarter of 2011 show a decline of 15% in industrial activities, a fall of 36% in investment, a drop in tourism by 45%, a downfall in imports by 7.3% and an in increase in export by 4.8%.

Growth forecasts for 2011 expect stagnation rather than the gain of 5.4% as originally planned. The public deficit is believed to reach 5% as opposed to 2.5%, which was initially anticipated. Furthermore, the debt ratio could rise to 47% against 39% expected.

The social implications of the economic recession are rather high. The reduction of employment is currently estimated at 7,000 jobs per month which adds up to the 500,000 officially registered as unemployed, not taking into account 80 000 graduates with diplomas of higher education and 40,000 with diplomas of professional courses as well as the youngsters without professional qualifications, who nevertheless seek some work.

Hence, increasing unemployment particularly affects young graduates. The number of unemployed is likely to reach 700,000 in 2011, which corresponds to an unemployment rate of around 20%.


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7.1 Impact on Tourism

The recession in the tourism industry is rather worrying as tourism is a vital sector for the Tunisian economy. It represents 8% of GDP and provides employment for about 400,000 people, or 12.5% of the total workforce. Tourism constitutes the main source of foreign currency in the Tunisian economy and covers up to 60% of the deficit in the trade balance.

While the Tunisian tourism market exceeded 7 million tourists in 2008, in 2009 and 2010 it suffered from the consequences of the economic crisis on the purchasing power of the European middle classes. It is estimated that Tunisia is dependent on the EU up to 83% in tourism revenues.

In the first 4 months of 2011, the number of tourist visiting fell by 45%, the number of overnight stays dropped by 61% and there was a decrease of 48% in revenues. Moreover, total income from tourism in the first four months of 2011 amounted to 389 million Tunisian dinars, in comparison to TND 764 million over the same period in 2010.

8 INTERNATIONAL TRADE INDICATORS

Tunisia’s global exports totalled EUR 9.8 billion in 2009 while its imports amounted to EUR 14.5 billion. It has a trade deficit of almost 10% of GDP. Tunisia undertakes 70% of its trade with the European Union. Tunisia’s international trade grew significantly between 2007 and 2009: exports grew by 21.8% and imports by 23.7%. A significant slowdown was, however, noted as from the start of 2009.

The mechanical, electrical and electronics sector occupies a growing place in its trade. Despite the surplus recorded by the tourism sector, the balance of payments deficit amounted to EUR 1.2 billion in 2008, or 4.3% of GDP (as opposed to 2.2% in 2007).

Destination of Tunisian exports by country:in million euro %

World 9,857.4 100.0%

1-EU-27 7,171.9 72.8%

2-Libya 628.9 6.9%

3-Algeria 231.9 2.4%

4-United States 222.4 2.3%

5-India 154.3 1.6%

_____________________________________________Source: Eurostat

Origin of Tunisian imports by country:in million euro %

World 14,547.8 100.0%

1-EU-27 9,923.1 68.2%

2-Libya 574.5 3.9%


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3-China 558.7 3.8%

4-Turkey 503.7 3.5%


_____________________________________________Source: Eurostat

Tunisia’s main trading partners:in million euro %

World 24,405.2 100.0%

1-EU-27 17,095.1 70.0%

2-Libya 1,257.5 5.2%

3-Turkey 653.0 2.7%

4-China 629.3 2.6%


_____________________________________________Source: Eurostat

Foreign direct investment (FDI) totalled EUR 20.8 billion in 2008.

This now represents 6.2% of GDP. Growth of 51% was noted between 2007 and 2008.

Tunisia’s global economic integration:

Tunisia’s development strategy is focused on global economic integration:

On a global level, Tunisia has been a member of the WTO since March 1995 and is a signatory to the General Agreement on Trade in Services (GATS);

On a European level, Tunisia has been involved in the Barcelona Process since 1995 through its Association Agreement with the European Union. This process aims to create a free trade area between the EU and the signatory countries of the Mediterranean basin;

On a regional level, Tunisia signed the Agadir Agreement with Egypt, Jordan and Morocco in 2004, which provides for the immediate dismantling of customs duties on agricultural and processed agricultural products and industrial goods.

9 TUNISIA’S TRADE WITH THE EUROPEAN UNION

In 2009 EU exports to Tunisia totalled EUR 9 billion and imports from Tunisia came to EUR 7.9 billion. The EU is Tunisia’s main trading partner, accounting for 64.5% of imports and 72.1% of exports.

Manufactured products account for almost 76% of Tunisia’s exports to the EU, including: clothing 28.2%

machinery, transport equipment 28.4%


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energy 16.4%

agricultural products 5.4%

_____________________________________________

Source: Eurostat

Tunisia’s main imports from the EU are: machinery, transport equipment 38.3%

textiles 13.0%

chemicals and related products 9.8%

energy 8.3%

_____________________________________________

Source: Eurostat

Foreign direct investment

The EU is Tunisia’s main foreign investor (17% in 2004). FDI is concentrated in infrastructure but can also be found in the textiles and clothing sectors.

9.1 The EU-Tunisia Association Agreement15

Euro-Mediterranean Association Agreements fall within the context of the Barcelona Process. Tunisia was the first Mediterranean country to sign an Association Agreement with the European Union, in July 1995. The EU-Tunisia Association Agreement entered into force on 1 March 1998. It includes trade provisions that provide for a gradual dismantling of customs duties and the creation of a free trade area. There has thus been effective liberalisation of all exports of industrial products and more than 80% of agricultural products, which enter the EU exempt from customs duties or at preferential rates. In return, one-third of European agricultural exports benefit from tariff preferences in Tunisia. Tunisia completed the tariff dismantling for its industrial products in 2008.

Tunisia’s trade deficit with the EU (as is the case for all Mediterranean countries, with the exception of Turkey) can largely be explained by the asymmetrical trade liberalisation that has taken place with the EU, characterised by an opening up of the Community market to the bulk of Tunisian exports while the Tunisian market has been liberalised gradually over a period of 10-12 years.

The Association Agreement has been supplemented over time by a whole series of agreements aimed at achieving full trade liberalisation. The agricultural component thus forms the object of a 'revision clause' that enables gradual improvements in the liberalisation of agricultural products, processed agricultural products and fishery products. Agricultural negotiations are currently underway with Tunisia;

The services and right of establishment component has been delayed. Discussions are under way with Tunisia. Postal services are forming a stumbling block;

Finally, the EU signed a bilateral protocol with Tunisia in December 2009, establishing a mechanism for resolving trade disputes.

15 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:21998A0330(01):FR:NOT


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9.2 Weakness of intra-regional trade

An essential prerequisite to regional economic integration is that free trade agreements be signed between the countries of the southern Mediterranean rim, in addition to Association Agreements with the EU. Tunisia thus signed a bilateral agreement with Libya in 2002. In 2004 it entered into the Agadir Agreement with Egypt, Jordan and Morocco. This agreement came into force in 2006 although its implementation only became effective in 2007. Its scope is still limited due to restrictive rules of origin and an agricultural exclusion. The free trade area created by the Agadir Agreement is still too recent to measure its effects.

Intra-regional trade between the countries of the southern Mediterranean rim totalled EUR 15 billion in 2009, which is low for an economic area of this size. Trade between the EU and its Mediterranean partners can, more often than not, be seen as competing rather than complementary. On the other hand, the low level of intra-regional trade and investment between the countries of the southern Mediterranean, when compared with their external trade relations, in particular with the European Union, forms a significant obstacle to companies in these countries, with the risk that they will not benefit from the opening-up of markets.

Overall, the weakness of intra-regional trade can be put down to a number of reasons:

1. political problems such as the Israeli-Palestinian conflict, the closure of the land border between Algeria and Morocco (in the absence of an agreement on the Western Sahara), and even foreign interference in Lebanese policy;

2. the protectionist practices of Mediterranean countries, as they cut their markets off both from each other and from the European Union. Protectionism is particularly noticeable among the countries of the Maghreb, where protection rates are among the highest in the region;

3. the economies of the countries of the South are competing rather than complementary;

4. a lack of economic diversification: their agricultural production is often the same;

5. a lack of infrastructure appropriate to the development of intra-regional trade;

6. problems of governance: some countries, such as Algeria, favour national production and restrict imports, which is inconsistent with the Association Agreements;

7. legal insecurity concerning foreign investments.

9.3 Cumulation of the rules of origin among the Mediterranean countries

Tunisia has begun to implement the new pan-Euro-Mediterranean system of cumulation of rules of origin which enables a product manufactured in one of the countries in the region to access the EU market or other Mediterranean markets on preferential conditions. This system is designed to encourage the creation of a regional market.

9.4 European Neighbourhood Policy and financial assistance

The EU-Tunisia cooperation constitutes an important part of the European Neighbourhood Policy (ENP), e.g. it obtains a financial assistance from the EU within the frame of the ENP. The Instrument of the European Neighbourhood Policy (ENPI) established a budget of €11.9 billion over the period 2007-2013 for all Euromed countries. A budget of €300 million was allocated to Tunisia. These funds are mainlytargeted at projects providing measures to facilitate trade.


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10 RELATIONS WITH THE EU

Tunisia’s relations with the EU are strong. The cooperation with the new regime in Tunis has been intensive in political and financial terms. The overall assistance from the European Commission alone amount to €156.5 million in this year (including €40 million of humanitarian assistance due to the civil war in Libya).

Summary of EU assistance to Tunisia:

Instrument Objective Beneficiaries Amount (€ million)

Instrument for Stability Preparation of elections and support to civil society

Independent Election Commission (ISIE), Women’s Rights Organisations, Journalists’ Union, Tunisian League of Human Rights and Euro-Mediterranean Foundation for the support to the human rights defenders

2

European Instrument for Democracy and Human Rights

Domestic election observation, training and technical assistance to political parties, promotion of freedom of expression and democratic values

Tunisian NGOs 2

Non-state actor programme

Local development projects, creation of employment, capacity-building of youth and women’s NGOs

Civil Society Organisation in the 14 less advanced governorates

2.5

SPRING (Support to Partnership, Reform and Inclusive Growth)

reinforcement of governance and transparency, reinforcement of the financial sector, improving access to employment, regional development, public intervention of social character

Tunisian government via budgetary support

90

Regional development programme

Labour-intensive public works, rehabilitation of disadvantaged neighbourhoods, support to micro-finance institutions

ILO, CPSCL (local authorities’ financing institution), small entrepreneurs

20

Total 116.5

ECHO Assistance to refugees from Libya residing in Tunisia

40


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The first meeting of the EU/Tunisia Task Force on 28-29 September16 agreed on a series of concrete measures to help Tunisia restart its economy and ease its transition to a democratic future. Co-chaired by HR/VP Catherine Ashton and Prime Minister Beji Caid al-Sebsi, the taskforce was established to coordinate European and international support to allow quicker and more effective assistance. EU financial support to Tunisia could approach €4 billion between 2011 and 2013, a clear evidence of the more for more approach in the reformed ENP..

The Task Force agreed on a number of deliverables in key areas: the creation of an EU-Tunisia 'Privileged Partnership' covering all areas of mutual interest; asset recovery; short-term economic support; medium-term measures for growth and jobs; opening of markets; and promoting mobility and civil society.

Negotiations to establish a privileged partnership in all areas of mutual interest have since then started. This partnership will respond to Tunisia's needs and will match both partners' new ambitions. The joint ambition of the EU and Tunisia is to build this partnership through the implementation of an action plan for a step change in bilateral relations. It will strengthen political cooperation, in particular between the Tunisian Parliament and the European Parliament, boost the democratisation process and support progressive integration in the European Union's Internal Market, through a process of legislative and regulatory approximation

The European Investment Bank (BEI), which has already committed more than 470 millions euro this year in Tunisia, announced its intention to further increase its financing, notably in favour of small and medium enterprises. It hopes to reach a financing amount of 800 millions euro for Tunisia before the end of the year, which represents a 60% increase compared to last year. Payments from loans have increased by 50%. These EIB operations will allow the creation of 20,000 direct jobs.

Tunisia and the EU agreed to continue negotiations on liberalisation of trade in agricultural products, transformed agricultural products and fisheries products. This liberalisation could be progressive, while granting to Tunisia asymmetrical dismantling schedules. In this framework, the EU is ready to consider favourably the Tunisian proposals to improve concessions. In addition, Tunisia and the EU will work together to develop rural areas, strengthen the agricultural production capacity and the upgrading of this sector.

Tunisia and the European Commission decided to launch shortly a dialogue on mobility, migration and security with a view to concluding a mobility partnership. Tunisia, which made a proposal for employment and mobility, is the first country of the region with which these negotiations are launched. Adapted to Tunisia's own needs and specificities, the partnership aims to provide notably visa facilitation for some categories of peoples, readmission, and concerted border management, access to the EU job market, migration, asylum and the strengthening of Tunisia's capacities in all these areas.

In order to strengthen the cooperation with Tunisian university institutions, the Commission announced an increase in the allocation to the Erasmus Mundus programme (20 million euro for the neighbourhood countries) and Tempus (11 million euro). Tunisian students will benefit from more thana thousand mobility additional actions.

An EU-Tunisia Association Committee is in charge of the follow-up of the Task Force's recommendations, and the Task Force will hold a second meeting in the first half of 2012.

16 http://eeas.europa.eu/tunisia/docs/20110929_taskforce_en.pdf


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SOURCES17

Articles

Emma C. Murphy: The Tunisian Uprising and the Precarious Path to Democracy, Mediterranean Politics, Routledge 2011

Alexis Arieff: Political Transition in Tunisia, CRS Report for Congress, 20 September 2011

Marina Ottawy: Tunisia: The Revolution is Over, Can Reform Continue? Carnegie Endowment for International Peace, 13 July 2011

Presentation by Inès Maatar, judge at the Tunis Appeals Court in the hearing on the Tunisian democratic transition organised by the S&D Group on 21 September 2011

Osservatorio mediterraneo, Numero Zero, Paralleli – Istituto Euromediterraneo del Nord Ovest

General information

Economist Intelligence Unit: Country Report Tunisia September 2011 www.eiu.com

Union européenne – Mission d’Observation Electorale en Tunisie, Rapport intérimaire no. 1, 19 September 2011

IHS Country Intelligence Report, September 2011

Websites

www.freedomhouse.org

www.eeas.europa.eu

www.diplomatie.gov.tn

17 Michele Bigoni, EP Library

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