Transport Sector Reform and Deeper Economic Integration in the Euro-Mediterranean Region

This paper argues that the countries of the southern Mediterranean should move beyond free trade towards deeper forms of integration with the EU through a selective harmonization of their regulatory frameworks with those of the European Single Market. In the transport sector, such deeper integration would amount to the creation of a ‘common transport space’ in which a wide range of bottlenecks, frictions, and inefficiencies in the region’s multimodal system would be removed in order to facilitate the flow of goods, people, and investments. The paper discusses the various national and cross-border reforms that would have to be implemented to achieve that objective. It analyses sector performance and sector policies in the Mediterranean Partners (MPs) and benchmarks them against international best practice. It reviews the policy framework and reform trends in the European Union. It analyses the linkages between transport sector policies and regional integration in North America, Eastern European, and the Baltic Sea region. It reviews the implications of business trends such as supply-chain management and outward processing trade for the participation of the southern Mediterranean countries in European production networks. And it discusses issues such as the relevance of the third-party logistics industry, the policy implications of multimodal transport, or the concept of transport corridors. With the majority of cross-border transport flows in the region carried by sea or air, the reform needs and reform options for these two modes receive particular attention.