Dar Al-Hayat | Beirut | 02 November 2006
The Importance of Free Trade Agreements
Once again, the issue of some Arab countries signing free trade agreements with other countries and economic blocs in the world comes to surface. This topic has recently acquired an economic and social dimension in the Arab countries, especially with regard to the agreements signed with the US.
The Gulf Cooperation Council (GCC) States are most active in this area. They have signed significant agreements in this regard. They are also about to conclude other agreements in the next few years, including an agreement with the EU countries, which took two decades to be prepared, in addition to the ongoing talks between the GCC States and Japan, China and India.
However, the agreements with the abovementioned countries did not attract the attention of those concerned in the economic affair, unlike the similar agreement signed by the US with Jordan, Morocco and Bahrain in the past three years, at a time when preparations are underway to sign similar agreements with Egypt, Qatar, the UAE and Oman.
Why all the interest in free trade agreements with the US? The past months witnessed extensive discussions in the Arab countries concerned, in which specialists and members of the community participated. We believe, this attention is due to two main factors. The first is in the Arab communities’ uncertainty about anything that is American; a result of accumulations of long years of Washington’s bias toward Israel. The second lies in the US’ socially and politically hard-line conditions, which it is trying to impose upon the signing of free trade agreements with the world countries, especially the Arab countries.
In fact, free trade agreements between some Arab and Asian countries do not involve any political conditions or demands; they only focus on meeting the requirements of free trade and the movement of goods and services among these countries without customs duties or obstacles.
The agreements, which are expected to be signed soon between the GCC countries and the EU, include some non-economic demands, but they are limited, and the GCC countries should be able to meet them in the near future. Some of them have been already answered.
The problem lies in the similar agreements with the US. There are complex demands related to trade unions and political reforms, for which some region countries may be completely unprepared. Either way, are the Arab countries in need of such agreements, especially with the US?
The answer carries a very important futuristic outlook. Arab countries, especially the Gulf ones, need markets for their growing exports, especially from the petroleum products, petrochemicals and aluminum. The US, with its $12.5 trillion economy or one third of the world economy, and its population of 300 million, is an important source of export, noting that the economy of all Arab countries does not exceed $1 trillion.
On the other hand, the US will increasingly rely on energy sources available in the Arab countries. This means that the common interests are greatly vital. To take advantage of the opportunities available to both parties, it is important to build bridges of mutual trust through balanced, non-biased attitudes of the US, and giving priority to economic interests over the clash of civilizations thesis, which has proven unfeasible through the ongoing conflicts.
The European relations with the Arab World can be regarded as a model that the US should follow. The evidence lies in the welcome of free trade agreements between the EU and Arab countries, and in the doubts about free trade agreements with the US.
The ball is in the US’ court. But the abovementioned EU and US stances reflect what could be born by the future of economic interests being given priority over other extremist ideological ideas and orientations.