Free Trade

Overview Look at statistics MENA in trade debate Look at trade with: Arab world Europe USA

MENA exports and imports (US$ million) 1970-2010

Fuel exports (% of merchandise exports), 2010

MENA exports by destination (% of total) 1970-2012

MENA imports by origin (% of total) 1970-2012

WTO membership Green: members, red: non-members yellow: observers (accession states), blue: double representation by EU

MENA WTO members Bahrain, Kingdom of  1 January 1995 (GATT: 13 December 1993) Egypt  30 June 1995 (GATT: 9 May 1970) Israel  21 April 1995 (GATT: 5 July 1962) Jordan  11 April 2000 Kuwait, the State of  1 January 1995 (GATT: 3 May 1963) Morocco  1 January 1995 (GATT: 17 June 1987) Oman  9 November 2000 Qatar  13 January 1996 (GATT: 7 April 1994) Saudi Arabia, Kingdom of  11 December 2005 Tunisia  29 March 1995 (GATT: 29 August 1990) Turkey  26 March 1995 (GATT: 17 October 1951) United Arab Emirates  10 April 1996 (GATT: 8 March 1994) Yemen  26 June 2014

MENA WTO observers (accession countries) Algeria Iran Iraq Lebanese Republic Libya Sudan Syrian Arab Republic

Greater Arab Free Trade Area

Arab trade Obstacles: GAFTA Historical patterns: 19th century shift to Europe Colonial domination => shaped economies => anti-colonial backlash (including vs. elites who had been linked to colonial economy – “comprador bourgeoisie” vs. “national bourgeoisie” => state-led development) Economic nationalism and ISI trumped Arab nationalism => part of wider pattern of not letting go; populist authoritarianism => economy and regime maintenance! Not an instrument new state elites wanted to cede => obstacle to free trade Complementarity: all want to sell the same agricultural products or oil, all want to import the same manufactured products => little diversification (except oil importers/exporters) GAFTA

Euro-Mediterranean partnerships Euro-Mediterranean Partnership (EMP)/Barcelona Process 1995 Association agreements: Tunisia (’95), Israel (’95), Morocco (’96), Palestinian authority (‘97 Interim), Jordan(’97), Egypt (2001), Algeria (2002), Libya (2002), Syria (negotiations) Trade, humanitarian aspects, security, BUT trade as only success! European Neighbourhood Policy (2003/2004) Including Belarus and Ukraine (not just MENA) Following US “Broader Middle East and North Africa” initiative Union for the Mediterranean Joint presidency and new institutions but little substantive change

US and MENA Political > economic aims! QIZs and peace Israel and Jordan/Egypt: 1997 Jordan QIZ with Egypt (in effect since 2005) FTAs: Political! Part of Bush administration efforts to fight terrorism through prosperity: Bahrain 2004 Morocco 2004 Oman 2006 UAE: negotiations since 2005 BUT Dubai Ports => on ice FTA Morocco and US (CROMBOIS): European market will continue to absorb bulk of Moroccan exports New investors attracted to Morocco’s textile sector Morocco’s pharmaceutical sector hit Agriculture: complete opening after 15 years. Close political alliance Morocco-USA

Conclusions Major obstacles to intra-Arab trade persist Europe: Economic and security interests USA: Security interests South-South trade?