Logistical Constraints on International Trade in the Maghreb

May 1996 To strengthen strategic alliances with European trading and industrial partners, Maghreb firms should rethink the logistics of their distribution strategy in Europe, taking recent changes into account and adjusting their trade practices. They should try to strengthen interdependency with European partners, develop just-in-time multimodal transport and logistics management, and negotiate maritime and inland freight rates in the context of general transport contracts. Without a competitive transport industry, the Maghreb countries will not truly benefit from reform aimed at increasing the region's share of international trade. A study of barriers to the region's trade, especially with countries of the European Union, identified more than 30 barriers, in four categories: barriers to imports, to exports, of infrastructure and equipment, and of intra-Maghreb trade. These include: Direct barriers ° From traditional distortions (price, discriminatory access to markets). ° Nontariff barriers (administrative, regulatory, and tax-related restrictions). ° Traffic agreements (protecting national flags). ° Lack of infrastructure and equipment. Indirect barriers, deriving from ° Trade harmonization (simplified customs procedures and tariff structures, elimination of quotas, reduction of customs tariffs on transport equipment). ° Technology lags (telecommunications and handling). Amiot and Salama quantify barriers in terms of tariff equivalents, expressed as a nominal rate of protection based on the f.o.b. value of the merchandise. But the nominal rate of protection measures only the direct costs of distortions. The effective rate of protection measures both direct and indirect effects, and effective rates are generally twice as high as nominal rates. To reconcile macroeconomic and microeconomic approaches to measuring effective rates, Amiot and Salama use a partial equilibrium model (SMART model) to estimate the impact on the balance of payments of eliminating excess costs. Most of the corrective policies they recommend concern multimodal transport in the trade between Europe and the Arab Maghreb Union. The challenges are considerable: not only does such a system pave the way for cost and time savings (just-in-time transport), but it also adopts the logistics management that the most advanced European enterprises use to orchestrate their raw material purchasing, production, and marketing functions. A multimodel transport system allows them to reduce inventories significantly and to respond better to volatile demand.
Essentials for just-in-time multimodal transport and logistics management include efficient modern transport techniques, efficient communications systems, efficient modern merchandise handling, and appropriate regulations. These conditions are still not fully in place in the Maghreb countries, except partially in some parts of the clothing and textile industry. This paper --- a product of the Private Sector Development, Finance, and Infrastructure Division, Middle East and North Africa, Country Department I --- is part of a larger effort in the department to assist Maghrebian countries in achieving a broad-ranging set of integration arrangements with the European Union that will improve their competitive positions.