US exports to Arab nations may touch new highs
Times of Oman - 08/11/2005
US exports to Arab nations may touch new highs
MUSCAT - With many Arab nations going ahead with their plans to sign free-trade agreements (FTAs) with the US, trade and industry associations are projecting extraordinary growth in US exports to the Arab world in the years to come.
Key areas identified include financial services, construction/engineering, information and communication technology and consumer products.
US exports to Arab countries may touch nearly $38 billion in 2006, a 40 per cent jump compared to the expected figure for the current year ending December 31, 2005, sources at the US Department of State’s Bureau of International Information Programmes reveal, quoting the US-Arab Chamber of Commerce.
On-an-year-on-year basis, US merchandise exports to the Arab world are expected to record a 38 per cent jump at more than $26 billion in 2005.
Saudi Arabia, the largest US market among Arab countries, is expected to buy $10.7 billion worth of goods in 2006, followed by the United Arab Emirates, which is predicted to import $10.2 billion in US goods.
The US had expressed hopes that the proposed US-Middle East Free Trade Area will become a reality by 2013. The US has already completed FTAs with Israel, Jordan and Morocco, and has finished FTA negotiations with Bahrain and Oman, and currently is negotiating an agreement with the United Arab Emirates.
The United States and Egypt are weighing a decision to open FTA negotiations. Egypt is expected to be the third-largest market among Arab countries for US exports in 2006, absorbing more than $5 billion worth of goods.
"The opportunities are really across the board and bode very well for US companies wanting to do business in the region," David Hamod, president of the US-Arab chamber, said recently.
The forecast dealt with 21 Arab countries and the Palestinian territories, from Mauritania and Morocco in northwestern Africa eastward to Iraq and the countries bordering the western shore of the Gulf, as well as Sudan, Somalia and Djibouti.
The chamber attributes the surge in US exports to the Arab countries to three main factors: higher oil prices that are boosting the import purchasing power of Arab countries; increased investment by the Arab private sector, especially after September 11, 2001, when Arab businessmen began staying ’closer to home’, and; an expanding consumer market as a result of globalisation.
An FTA links the economies of the United States and its signatory partners, removing virtually all barriers to trade and investment in both directions. FTAs include protections of foreign investment, the environment, intellectual property and workers’ rights and open government procurement procedures.
In 2000, Jordan became the first Arab country to conclude an FTA with the United States, leading to surges in exports, foreign investment and job creation. From 2000 to 2004, Jordanian exports to the US grew from $63 million to $1.1 billion.
US President George Bush notified Congress on October 17, 2005 of his intention to sign the recently concluded free-trade agreement (FTA) between the US and Oman.
US Trade Representative Rob Portman and Oman’s Minister of Commerce and Industry Maqbool bin Ali Sultan announced the completion of the agreement on October 3, 2005 after only seven months of negotiations. Oman is the fifth country in the Middle East and North Africa to conclude an FTA with the United States.
In his notice to the Congress, Bush said: "Entering into an FTA with Oman will build on the FTAs that we already have with Israel, Jordan, and Morocco, as well as the FTA that we have concluded with Bahrain, and will be an important step on the path to fulfilling my vision of developing economic growth and democracy in the Middle East and creating a US-Middle East Free Trade Area by 2013."
