Issues facing the Arab common market
Regional, Economics, 8/26/2003

President of the Federation of Arab Chambers of Commerce, Industry and Agriculture (FACCIA), Khaled Abu Ismail said that President Mubarak's sponsoring the federation's 95th extraordinary session and his call for action to establish an Arab common market at this particularly sensitive time are crucial.

In an interview with the Middle East News Agency (MENA), Abu Ismail said that the President's call for action will have a positive effect on the outcome of the meetings of the federation this round, which starts next Monday, which might be a turning point leading to the establishment of the Arab common market.

"The President's call reflects the farsightedness of his thinking, and his desire to strengthen the Arab position at a time when big economic blocs have a vital role, not only in the global economy, but also in the political and security arenas," Abu Ismail said.

The FACCIA chairman added that the next round of meetings come at a sensitive timing that requires practical steps towards the establishment of the Arab common market.

Resolution 17 for the establishment of the Arab common market was passed by the Arab Council for Economic Unity on 13 August, 1964. It was planned that the resolution would be put into effect in January, 1965, and that the process of liberalising Arab trade would be carried out in six phases by 1970.

In the beginning, only four Arab countries -- Jordan, Syria, Iraq and Egypt -- signed the agreement.

Libya, Mauritania, Yemen and Palestine were to sign up later, and now the agreement has fourteen Arab signatories.

The implementation of the economic unity agreement amongst the Arab countries progressed steadily until the 1970s. After that the situation began to deteriorate with the escalation of inter-Arab disputes, especially after the boycott the Arabs imposed in their relations with Egypt as a result of its peace agreement with Israel, and the Iraqi invasion of Kuwait.

In a bid to boost inter-Arab trade and in line with the recommendations of the 1996 Arab Summit in Cairo, the Arab Council for Social and Economic Affairs drew up a programme for the enactment of the economic union agreement by liberalising Arab trade by 2005.

Abu Ismail said that in spite of the fact that the population of the Arab world is around 380 million, inter-Arab trade accounts for a mere 8.5 per cent of total trade volume. "There are around $800 million in Arab funds in banks overseas.

This money must come back to the Arab world and be put to work in the creation of the Arab free trade zone," Abu Ismail added.

The FACCIA chief referred to the principle by which the Arabs should estimate their economic dealings and boosting inter-Arab cooperation, as opposed to "the parochial considerations of every individual country's short-term gains or losses," Abu Ismail said.

Commenting on the need of Arab trade for greater liberalisation, Abu Ismail said that Arab commerce must foster new avenues for cooperation among the Arab countries in labour and services.

"But that needs a clear vision on the side of the Arab economic planners," he said.

According to Abu Ismail, in order that the Arab common market thrive in a healthy environment, "customs tariffs, taxation and fees imposed in January 1998, which are all obstacles to Arab economic cooperation, must all be abolished or reduced to their minimum."

"Besides, procedures relating to health and security, and rules of origin must all be swept aside," Abu Ismail said.

The elimination of the customs duties and other protectionist measures will make it easier for Arab trade volume to rise, which will be in the best interest of all Arab countries.

"That will encourage inter- Arab trade, and open the way wide for Arab funds deposited abroad to be invested in the Arab world. "Hence, the Arab economic integration will flourish," Abu Ismail said.

Previous Stories:
  Mubarak keen on private sector role in Arab common market   (8/25/2003)
  Arab economists, analysts meet in Alexandria for economic integration talks   (8/23/2003)
  July 8, 2003 Experts: Arab common market should be accelerated   (7/8/2003)
  Arab industrial integration vital for Common Market   (12/23/2002)
  A call to establish a common pharmaceutical market   (7/4/2001)
  Arab stock market statutes drafted, official   (6/15/2001)
  Arab document for specifying on products' origin and content to increase Arab inter-trade   (5/31/2000)
  Arab labor conference starts today in Sharm El-Sheikh   (3/4/2000)
  US $850,000, the budget of the Arab economic unity council   (2/4/2000)
  Six countries to join Arab market   (8/12/1999)

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