Arab-European relations

Last week, I travelled to Berlin upon an invitation from the Euro-Mediterranean Association for Cooperation and Development to give a keynote speech on the future of such relations.

The relation with Europe since the Crusades has been dominated by periods of conflict, competition and trade. The prevalent mode of exchange was purely mercantilistic in nature. Arabs and Iran controlled trade with east and south Asia, and in return sold most goods into Europe. In exchange, Arabs and Italians (Venice and Genoa) served as the intermediaries and bankers.

Eventually, Europe, running out of bullion, began a campaign of geographical discoveries and colonisation. After the Armada in the latter part of the 16th century and the earlier discovery of America and the route to India via the Cape of the Good Hope, a massive trade diversion took place. Europeans secured gold and silver from the new world, and the back route to India enabled Europe to deal directly with India and China, thus disintermediating the Arabs and Iranians.

The Ottomans on the other side were prospering and expanding into north Africa, Al Mashreq countries and eastern Europe. Their might allowed them to control trade with Europe, which needed grains from surplus areas under the Ottomans, such as Sudan and Algeria.

When Europe was denied access to grains in years of drought and famine, they sent their freelancing buccaneers to seize ships in the Mediterranean and divert their route to European port cities. The Ottomans sent Barbarossa, who punished the ports from which the buccaneers used to come.

Since the rise of the European Common Market and then the EU, the partnership agreements were skewed in favour of the EU countries, and were predominantly focused on trade surplus.

After the rise of the Arab Spring, trade with Europe witnessed ups and downs, mostly downs. In 2017, trade surplus in favour of Europe was 93.0 billion euros and dropped to 65 billion euros in 2018. Without the oil exports, such a deficit would have almost reached 180 billion euros.

The current events in the Arab world, Iran and Turkey may cause further trade diversion in favour of other countries like the US, Russia and China. Europe seems to be the weaker side and it cannot rely on Arab diplomacy to confront other world powers.

Both regions are in big need of each other. They are also expected to diversify relations to other areas like technology, less myopic trade practices and human training.

This short article is meant to be an eye-opener. Future relations are a complex undertaking that deserves continued meeting of minds.