Guest Blog: U.S. – MENA Trade Treaty: Four Primary Objectives Outlined

Back in 2003, President George W. Bush proposed a new trade treaty between the US and the Arab states of the Middle East and North Africa (MENA). “The Arab world has a great cultural tradition, but is largely missing out on the economic progress of our time,” he said at the time. He predicted that the pact would be in force by 2013. Unfortunately until now not much has happened on this front.

MENA Economic Growth. Click for larger image

But much indeed has happened in the Arab world over the past year. So, at an event hosted by the U.S.-Middle East Free Trade Coalition, the National Foreign Trade Council and Washington International Trade Association Deputy U.S. Trade Representative Ambassador Miriam Sapiro proposed several initiatives to increase US trade and investment in the area, but was short of proposing an overall Free Trade Agreement. “Ever since the Arab Spring began, the Administration has been working to define how we can best support the aspirations of the citizens of the region for expanded opportunities. We are particularly focused on ways to create broad-based economic growth that can help support democratic reforms by providing a strong foundation for inclusive development and prosperity.”

The Administration has four main objectives for trade development in the MENA region:

1. Trade facilitation: Lowering tariffs and other non-tariff barriers that currently hinder trade between the US and many of the MENA countries. “We see significant possibilities for early productive collaboration, not only bilaterally with our MENA counterparts, but also with other governments and international institutions. Improvements and cooperation in customs procedures and establishing fair, predictable, and transparent rules are essential.”
2. Greater SME involvement in trade and investment-related activities: OPIC (the Overseas Private Investment Corporation) is proposing to provide up to $2 billion in financial support to catalyze small business investment in the MENA region and to “fast track” loans to SMEs in the region.
3. Expansion of services and investment: “Transition governments that implement policy changes creating a welcoming environment for investment – especially the transparency, predictability and rule of law-  will be the first to see foreign investment flow, spurring welcome innovation along with new jobs.” As a start, the Trade Development agency (TDA) is providing grant funding in the form of pilot projects, feasibility studies and technical assistance in the region. The program in Egypt is featured on a new TDA website, Egypt: Forward – Partnering for Trade and Economic Growth.
4. Improving access to and utilization of preference programs, such as the Generalized System of Preferences (GSP): The U.S already has FTAs with Bahrain, Jordon and Morocco. The administration wants to expand tariff reductions to other countries in the region as their political situations stabilize.

Ambassador Sapiro concluded her remarks stating, “While we are focusing initially on key trading partners in transition, we are also structuring our cooperation in a way that facilitates greater economic integration within the region and creates opportunities for other regional partners to join us. We envision sitting down with our regional counterparts and starting a dialogue that will enable us, as a group, to identify the most promising avenues for increasing trade and investment with, and within, the region. This dialogue would be an important step towards constructing a broader trade arrangement.”

Let’s hope this time it works!