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TRADE: U.S. Business Pushes for Mideast Trade

Emad Mekay

WASHINGTON, Oct 7 2004 (IPS) - Major U.S. corporations are joining forces to lobby for a U.S.-Middle East Free Trade Agreement (MEFTA) that President George W Bush proposed in 2003.

The group includes Boeing, Booz Allen Hamilton, ChevronTexaco, Dow, ExxonMobil, Intel, JR McDermott, Motorola and PhRMA, among others.

The companies launched the U.S.-Middle East Free Trade Coalition on Thursday, to be managed jointly by two powerful lobby groups: the 400-member National Foreign Trade Council (NFTC) and the Business Council for International Understanding (BCIU).

U.S. Trade Representative (USTR) Robert B Zoellick told the groups MEFTA could help fight terrorism and ease anger simmering over U.S. foreign policy in the region.

Many Arabs say they are disgruntled at the ongoing U.S. occupation of Iraq and Washington’s unwavering military and economic support for Israel.

Last May, Bush announced his strategy to create a free trade area in the Middle East by 2013, as part of Washington’s long-term policy shift in the wake of the Sep. 11, 2001 attacks on New York and the Pentagon, by attackers who came from the region.

“With the hand of U.S. economic partnership, the United States will embrace and encourage reformers across the region,” Zoellick said in his speech. “The MEFTA is a strategy for engagement that will help nations build free, dynamic economies.”

The 9/11 Commission that investigated the terrorist attacks urged Washington to expand trade with the Middle East as a way to advance U.S. interests there.

“This is a bold initiative that will significantly boost the economic interests of the United States,” said Bill Reinsch, president of the NFTC.

“The American business community has a vital stake in strengthening economic ties with the countries in the Middle East … it’s a worthy goal and one the U.S.-Middle East Free Trade Coalition pledges to aggressively support.”

The new body says it will act as an umbrella group to focus on the key components of MEFTA, and employ a range of educational, advocacy and outreach activities on behalf of trade. It will also provide a mechanism to allow businessmen to lead bilateral free trade agreements (FTAs).

Business people acknowledge the MEFTA plan has a security angle, and that “it will provide the United States with a great opportunity to forge better relations in an increasingly volatile part of the world,” said BCIU Vice President Jeffrey Donald.

According to Zoellick, similar business coalitions have helped Washington build trade deals and produced “important results for American workers and farmers and ranchers and businesses.”

In the Middle East, the United States has free trade agreements with Morocco, Israel and Jordan, while regional heavyweights like Egypt and Saudi Arabia continue to balk at U.S. demands to open their vast markets.

But Zoellick said Thursday the United Arab Emirates (UAE) and the small Gulf country of Oman were next in line for free trade talks, and that he will visit the two Arab countries next week to initiate discussions.

In U.S.-occupied Iraq, the interim government has pledged to open up the country’s economy to foreign trade and to implement other neo-liberal economic reforms. For example, under a new policy, foreigners can now own 100 percent of a local business.

Washington now has advisers in all Iraqi government departments, including the finance and economy ministries.

Under MEFTA, Washington would engage country by country and then later link the nations in a major agreement that would include many Arab countries’ arch-foe, Israel, a nation that still has no relations with many of its neighbours because of its occupation of Arab territories.

According to the USTR, the United States has also signed trade and investment framework agreements – a lighter version of free trade deals – with nine other countries, from Algeria to Yemen, as a preliminary step toward free trade. It also launched negotiations with the small Kingdom of Bahrain.

Washington is also pushing Saudi Arabia and other countries to join the global trade arbiter, the World Trade Organisation (WTO) and to accept its rules and regulations.

The deal with Morocco is the latest in a string of U.S. trade pacts with smaller countries around the world. Australia and four Central American governments have also completed negotiations with the United States in recent months.

Washington is also discussing FTAs with the Southern African Customs Union (South Africa, Botswana, Namibia, Lesotho and Swaziland) and is working to bring the Dominican Republic into the recent Central American pact.

U.S. officials have also announced they intend to begin talks with Thailand, Colombia, Peru, Ecuador, Bolivia and Panama.

But other developing countries considering trade deals either with Washington alone or within the multilateral setting of the WTO complain the United States and other industrialised nations push them to open up their markets without giving them equal access to the economies of rich nations.

A proposed Free Trade Area of the Americas (FTAA), which would encompass all countries in the western hemisphere except Cuba, has stalled over the resistance of some nations, led by Brazil, to open their markets to U.S. companies.

Among their other complaints, the governments argue Washington should modify its huge agriculture subsidies system, which places their own farmers at a disadvantage when they compete with U.S. agriculture.

But the USTR appears to be paying little attention to other countries’ demands and interests. His job is to open regions and nations for U.S. business. The Middle East is no exception.

“Opportunity abounds in the Middle East,” Zoellick said Thursday. “The region is already an important market for America’s manufacturers, our service firms, ranchers and farmers. As we build the Middle East Free Trade Area, these opportunities will only multiply.”

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