Italy Expands Mediterranean Trade

Countries in the Mediterranean Basin play an increasingly important role in Italy’s trade relations.

Italy

In 2011, bilateral trade between Italy and Mediterranean countries showed a contraction by around 6.6 billion euros. This reduction was exclusively due to the plunge in Italian oil imports from Libya (-67.6% in 2011 compared to 2010), whereas Italy’s trade with the other two countries of the Southern Rim of the Mediterranean involved in the so-called “Arab Spring” was not particularly affected in 2011: -2.3% with Tunisia and +5.7% with Egypt.

The resumption of commerce in 2012 allowed Italy to surpass the United States as leading trade partner of the Mediterranean Area and further distance itself from Germany, which is the second largest European trade partner of the Mediterranean Area.

Among the other international competitors, Chinese trade has grown since 2001. Total trade between China and the countries of the Mediterranean Basin in 2012 (52.2 billion euros) was 10 times higher than in 2001 (5.2 billion euros).

All these figures on foreign commerce show the growing importance of the Mediterranean in the global economy. Moreover, in earlier years the average growth of Mediterranean countries’ GDP (5.5% in the 2004-2008 period) was higher than that of Western countries. After the slowdown in 2011 – due to the “Arab Spring effect” – expectations for 2013 are for a gradual recovery (4.5-5.0% the expected growth for 2013).

However, when excluding energy products, Italy’s ranking of Mediterranean partner countries falls from first to fifth place. In fact, in the context of trade relations between Italy and the Mediterranean, energy is very significant. More than 46% of the trade consists of energy products (crude oil, natural gas, refined oil products), with an incidence which is more than double that of Italy’s main competitors (resulting between 14.5% of Germany and 22.4% of France).

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In the coming years, Germany can be an important reference point for the growth of the Italian trade of manufactured products with Mediterranean countries. Filling the gap with Germany means pointing to an increase in exports to the Mediterranean countries of almost 15 billion euros in the next 3 years: 10% of the overall export growth set by Italy’s 2013-2015 National Export Plan.

Massimo Deandreis is the General Director of SRM-Economic Research and Studies, an Economic Research Centre (connected with Intesa Sanpaolo Banking Group). Established in July 2003, SRM focuses on the Italian regional economy (with a special focus on Southern regions) and the Mediterranean economy, with a special focus on the economic relations between Italy and the South Mediterranean Countries. From 1995 to 2000, Massimo lived in Brussels and served as Head of the Italian Chamber of Commerce delegation to the European Union. In 2001 he was appointed General Director of the Piemonte Regional Chamber of Commerce in Turin, a position he held until October 2008. From November 2008 to October 2010 he served as Head of Cabinet of the President of the Intesa Sanpaolo Group (the first Italian Bank).