MIDEAST-ECONOMY: Trade Pact Rekindles Distant Dream of Common Market

By IPS Correspondents Reprint | | Print |

Nizar Al-Aly

RABAT, May 9 2001 (IPS) - Four Middle Eastern countries agreed Wednesday to establish a free trade zone as a step toward creating a much dreamed of Arab common market.

Egypt, Jordan, Morocco and Tunisia signed the agreement in the Atlantic coast city of Agadir. Moroccan officials said they hoped to set up the free trade area by the end of this year and to draw other Arab states into it over the coming decade. Representatives from Algeria, Lebanon, Libya, Mauritania, the Palestinian Authority and Syria also were present for Wednesday’s declaration.

Business and political analysts predicted the effort would get bogged down in the sorts of political squabbling that often have marred relations between Arab states.

Moroccan King Mohammed VI warned participants and observers at the Agadir talks, “We will only induce ourselves and our peoples into error if we continue to call for cooperation with others and for the opening of borders while our states have not yet been able to overcome the eruption of crises that squander their energies, cause the dismembering of their entities and paralyse their people’s development.”

Hassan Abdelkhalek, a prominent Arab affairs analyst at the daily newspaper Al-Alam, acknowledged the now-familiar pattern but added, “The four countries that signed the accord do not have any political problems” with one another.

“Unlike previous Arab trade meetings, generally marked by brainstorming but unrealistic and costly ventures, the Agadir gathering was designed to work on launching reasonable projects that are cost-effective to concerned Arab countries,” said Hassan Awrid, spokesman for the Moroccan royal palace.

Wednesday’s agreement itself pointed out that the decision “was prompted by the four countries’ confidence as to the need to back Arab cooperation in order to set up a large Arab free trade area and contribute the creation of a common Arab Market.”

The signatories already were bound by bilateral free trade accords. They said they were “convinced as to the need to establish a strong economic space to achieve a global development and face up the challenges, constraints and requirements of globalization.”

Abdelkhalek recalled past, unsuccessful experiments in Arab integration, including the Egyptian-Syrian union of the late 1960s, and the Arab-African Union between Morocco and Libya in the mid-1980s.

“For Arab nations to succeed with any unionist drive,” said commentator Mohamed Farhat, “they should.straighten up their relations at bilateral levels and (move) towards a genuine democratization at national (level).”

Political feuds would mar future integration efforts, a Jordanian official ventured on condition of anonymity, unless “each country embarks on projects to form the nucleus of pan-Arab infrastructure and economic cooperation” and separate political issues and economic interests.

The Council of Arab Economic Unity agreed in 1964 to establish the Arab Common Market but the body has done little since. That is singular evidence of the region’s inability to reconcile political differences with desire for the economic strength that many believe would come with integration.

The Agadir Accord, signed Wednesday, aims at raising the level of trade among Arab countries, currently estimated at between seven per cent and nine per cent of the region’s total trade.

The declaration includes proposals for unified rules covering exports and product standards and mechanisms to settle business disputes.

The document also recommends the liberalization of services, the harmonization of legislation, and the amendment of laws that might hinder the smooth flow of trade among Arab states.