U.S.–Middle East Free Trade Area

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The U.S. MEFTA initiative started in 2003 with the purpose of creating a U.S. Middle East Free Trade Area by 2013.

The U.S. objective with this initiative has been to gradually increase trade and investment in the Middle East, and to assist the Middle East countries in implementing domestic reforms, instituting the rule of law, protecting private property rights (including intellectual property), and creating a foundation for openness, economic growth, and prosperity.

Among the stated objectives are:

File:MEFTA 15112004.png
Screenshot from official US-MEFTA website, 15-11-2004
  • Actively supporting WTO membership of countries in the Middle East and Maghreb
  • Expanding the Generalized System of Preferences (GSP's) that currently provides duty-free entry to the U.S. market for some 3,500 products from 140 developing economies
  • Negotiating Trade and Investment Framework Agreements (TIFA's) that establish a framework for expanding trade and resolving outstanding disputes
  • Negotiating Bilateral Investment Treaties (BIT's) with interested countries by obligating governments to treat foreign investors fairly and offering legal protection equal to domestic investors
  • Negotiating comprehensive Free Trade Agreements (FTA's) with willing countries that demonstrate a commitment to economic openness and reform
  • Helping to target more than $1 billion of annual U.S funding and spur partnerships with private organizations and businesses that support trade and development
U.S. - Middle East Free Trade Efforts
Country FTA TIFA BIT WTO GSP
Israel Yes Yes Yes Yes
Jordan Yes Yes Yes Yes Yes
Morocco Yes Yes Yes Yes Yes
Bahrain Yes Yes Yes Yes Yes
Egypt Yes Yes Yes Yes
Lebanon Negotiating
Accession		 Yes
Algeria Yes Negotiating
Accession		 Yes
Tunisia Yes Yes Yes Yes
Saudi Arabia Yes Yes Not Eligible
Oman Yes Yes Yes Yes
Kuwait Yes Yes Not Eligible
UAE Announced Yes Yes Not Eligible
Yemen Yes Negotiating
Accession		 Yes
Qatar Yes Yes Not Eligible
Syria Not Eligible
Iraq Yes Observer Status Not Eligible
Libya Negotiating
Accession		 Not Eligible
Iran Not Eligible
Note: The Palestinian Authority participates in the U.S. — Israel FTA.

Current Agreements

US Agreements

The US currently has several bilateral free trade agreements with nations in the region.

Middle Eastern Agreements

Additionally many potential MEFTA states are already members of the multilateral Greater Arab Free Trade Area.

Other states are members of the multilateral Arab Maghreb Union.

The following, expected to constitute MEFTA,[1] are not members of existing Middle Eastern agreements:

Potential Issues

The single largest hurdle to MEFTA is the inclusion of Israel. Additional complications exist in getting agreements between the US and nations like Iran and Syria. Complications could still exist in getting trade with Lebanon and the Palestinian Authority given continuous Israeli control of occupied territories,[2] and the actions of militant groups such as Hamas and Hezbollah.

Other negotiations are largely minimized due the existence of current agreements and that there is not a lot of manufacturing industry in Arab states, as the majority of Arab states' economies are dependent on oil production. These factors mean there is little need for protective tariffs to prevent cheaper foreign goods from usurping local Companies. With little or no home industry Arab states are dependent on foreign goods for everything from Cars to household products. Governments therefore have a strong interest in eliminating tariffs to reduce prices.

One notable exception to this rule is the production of food. While most foods may be impractical to import from the United States where they are relatively cheap, eliminating barriers of trade among Arab states may lead to decreased prices of regionally grown food and protests among farmers.

See also

References

  1. ↑ Staff, "Middle East Free Trade Area: Progress Report", Congressional Research Service, 1 June 2006
  2. ↑ Israel and the Palestinians: Key terms, BBC

External links

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