Common digital identities to boost Mediterranean trade by 108 billion

In 2025, trade between the European Union and the countries of its Southern Neighbourhood exceeded 248 billion euros, with the EU accounting for around 41 per cent of the region’s total trade. European exports exceeded 133 billion, whilst imports from the Maghreb stood at 115. Yet over 108 billion dollars of potential trade remains untapped, despite more than thirty years of the Euro-Mediterranean partnership. The Gulf is also a strategic partner. Trade between the EU and the Gulf Cooperation Council reached 165.7 billion euros, whilst mutual direct investment now exceeds 350 billion.

At the same time, Brussels has opened its first free trade negotiations with the United Arab Emirates, signalling a new economic axis between Europe and the Gulf, within a context that has seen our exports to the United Arab Emirates alone grow by 48 per cent since 2019. The figures come from PAM, the Parliamentary Assembly of the Mediterranean, which, during the latest economic forum held in Morocco, put forward a proposal aimed at increasing the level of integration. The aim would be to build a common framework of trust, based on the mutual recognition of national digital identities, shared standards, common security levels, technical interoperability and common principles regarding privacy and cybersecurity.

The eIDAS Regulation and the future European Digital Identity Wallet are establishing a system that will enable European citizens to authenticate themselves, sign documents, store digital certificates and access public and private services across all Member States via a single digital wallet. At an event organised in San Marino, in collaboration with SM Capital, by Giulio Centemero, president of Pam, the topic of discussion was ‘Transnational digital identity: security, trust and economic development in the Euro-Mediterranean and Gulf regions’. “In the 21st century, economic corridors will not consist solely of ports, railways or undersea cables. They will also consist of interoperable digital identities, shared standards and institutional trust. Digital trust is the new invisible infrastructure of competitiveness,” explained Centemero, adding that “international competition will increasingly be decided not just by physical infrastructure, but by states’ ability to build mutual trust in the digital space.”

The proposal forms part of a series of major agreements: the new Mediterranean Pact, launched in October 2025; and the Global Gateway initiative, which, with a 7-billion package, has already catalysed some 30 billion in investment in the southern Mediterranean. The Mattei Plan and the resources from the new multi-annual budget, which aims to double the funding for the wider Mediterranean to 42 billion. What is holding back investment, it is argued, are precisely the unrecognised identities that lead to a tenfold increase in checks, compliance costs for banks and non-interoperable procurement management. ‘Every time a business opens a current account abroad, an investor subscribes to a fund, a student enrols at a university, a professional signs a contract or a bank carries out an anti-money laundering check, the procedures start almost from scratch,’ concluded Centemero. “Every country verifies identities and credentials according to different rules, generating administrative costs, longer processing times and duplication that hinder investment and mobility.” The proposed model comes from the UAE itself. The integration between India’s Aadhaar biometric identity system and the United Arab Emirates’ payment platform already serves as a concrete example of how interoperable digital infrastructures can drastically reduce the time, cost and complexity of international transactions. In this case, the UPI instant payment system, linked to biometric identity, is connected to the UAE’s AANI infrastructure. The scheme enables real-time payments and remittances, without the need for cards or cash. If Europe were to find an equivalent, cross-border transactions would be given a real boost. This is a long-term issue. The debate – on a common market that first emerges from digital protocols – is only just beginning.