Economy & Trade, Headlines, Middle East & North Africa, North America

TRADE-U.S.: Senators Want Mideast Commerce Tied to Reform

Emad Mekay

WASHINGTON, Mar 15 2004 (IPS) - A group of U.S. senators is trying to forge changes in the Middle East and South East Asia via a new trade programme that would open those markets to U.S. goods and agricultural products, while rewarding nations that support the Bush administration’s “war on terrorism”.

During a hearing in the U.S. Congress, three influential senators renewed calls for a programme that appears to be a classic example of the United States flexing its economic might for military ends and to reshape the areas in its own image.

The Middle East Trade and Engagement Act of 2003, also known as the Silk Road Bill, is modelled on existing trade programmes designed to promote the free market, political re-orientation and U.S. influence in sub-Saharan Africa and the Andean region.

The bill resembles the African Growth and Opportunity Act (AGOA), which was passed in 2000, the Andean Trade Preferences Act of 1991 and the Caribbean Basin Initiative of 2000.

Under the proposed Middle East programme, countries that meet certain criteria, such as a market-based economy and support for the war on terrorism, would be able to export certain goods, designated by the U.S. president, to the United States tariff free.

Senate Finance Committee Chairman Charles Grassley, a Republican Party member, joined senators Max Baucus, an opposition Democrat, and Republican John McCain to urge the administration of President George W. Bush last week to accelerate its plans to boost trade with the Middle East.

The senators say their plan, also called the Baucus-McCain Bill, would complement the administration’s regional trade initiative, which proposes to set up a U.S.-Middle East free trade area by 2013.

But the senators say the region, seen by many here as a hotbed of radicalism, needs a trade plan much sooner than 2013.

“A trade preference programme like the one Senator McCain and I are proposing will help countries in the Middle East now, in the short-term,” Baucus said.

McCain told the hearing that closed markets in the region have contributed to the “political tensions that beset many Arab and Muslim countries”, which face fast population growth and an average unemployment rate of about 22 percent.

He called the situation “an obvious recipe for disaster”.

The new deal would provide incentives to initiate what McCain called “political and social reform when necessary”, a euphemism for implementing pro-U.S. policies.

The United States has already been pressing regimes in the region to change their schoolbooks, monitor opposition groups with anti-U.S. slants and filter newspapers for anti-American sentiment.

McCain said trade could be tied directly to U.S. national security and foreign policy objectives in that part of the world.

“The bill that Senator Baucus and I introduced would establish a base line of trade as an incentive to those countries that don’t engage in activities that undermine our national security or foreign policy interests, and support a peaceful resolution of the Israeli-Palestinian conflict, among other things,” he said.

“Liberalising trade with key partners in the Middle East, Turkey and South Asia should be a strategic priority of the United States,” he added.

Baucus said the plan could also benefit U.S businesses.

“New commercial opportunities for U.S. companies means jobs for U.S. citizens … in short, a preference programme for the Middle East will help stimulate economies in the Middle East, create jobs both in the Middle East and here at home, and improve America’s security in the process”, he said.

Under AGOA and the other trade preferences pacts, U.S. partners can only export tariff free to the United States market if they meet certain criteria. U.S. officials must certify, for instance, that nations have liberalised their economies by privatising public assets, minimising government interference in private business and creating a U.S.-style legal system.

African activists have expressed concern recently that those requirements have been extended to include nations assisting in intelligence activities or in some cases giving the U.S. military access to their land and seaports.

Under AGOA, the U.S. president determines annually what countries are following ”eligibility requirements” and can penalise those that do not, a circumstance that means, in some degree, surrendering African sovereignty to Washington.

Other activists say the U.S. approach advocated by the senators is based on a colonial mentality.

“It’s almost like the second phase of invasion,” said Anuradha Mittal, acting executive director of Foodfirst, a California-based advocacy group.

“Once they have gone and conquered Afghanistan and Iraq, the next phase of that is always the market. This is a process of colonisation, which started with invasion; then came an occupation, then you bring in corporations.”

“This is something most of the world is very familiar with if you look at how colonies were created,” she added.

Mittal says the United States faces some of its toughest barriers to free trade in the Middle East. The region’s import tariffs are among the highest in the world, averaging more than 20 percent, and there are strict restrictions on foreign investment.

Most of the region’s countries have a long-standing economic boycott against Israel, while Iran, Syria and Libya face U.S. economic sanctions.

The United States already has free trade agreements with Israel and Jordan, neighbours in the Middle East. It has just concluded a deal with Morocco that awaits congressional ratification and U.S. trade officials say a pact with the small Gulf emirate of Bahrain is expected to be signed by June.

Undersecretary of Commerce Grant Aldonas told the Finance Committee that after Bahrain another small emirate on the Persian Gulf that has been instrumental in the U.S. invasion and occupation of Iraq, Qatar, could be the next nation to sign a deal.

Stressing that the Middle East is perhaps the most strategically important region for Washington today, Aldonas said trade officials would be approaching other countries in the area, including Saudi Arabia and Egypt.

He added there is great interest for a free trade agreement with Egypt, the Middle East’s largest country by population, but he said the enthusiasm is dampened by Cairo’s record of backing off from its commitments to the World Trade Organisation (WTO).

Egypt is a major market for U.S. goods, including the single largest buyer of U.S. wheat.

Undersecretary of State Alan Larson said Washington will also enlist the support of the Group of Seven (G7) most industrialised nations as well as the European Union in promoting free trade in the Middle East.