Middle East Free Trade Area

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:

*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 √ √ √ √ Jordan √ √ √ √ √ Morocco Ratified by U.S. √ √ √ √ Bahrain Signed √ √ √ √ Egypt √ √ √ √ Lebanon Negotiating Accession √ Algeria √ Negotiating Accession √ Tunisia √ √ √ √ Saudi Arabia √ Negotiating Accession Not Eligible Oman Announced √ √ √ Kuwait √ √ Not Eligible UAE Announced √ √ Not Eligible Yemen √ Negotiating Accession √ Qatar √ √ Not Eligible Syria Not Eligible Iraq √ 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.
*BHR United States-Bahrain Free Trade Agreement
*ISR US-Israel Free Trade Agreement
*JOR US-Jordan Free Trade Agreement
*MAR United States-Morocco Free Trade Agreement
*OMA US-Oman Free Trade Agreement

Middle Eastern Agreements

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

*ARE
*BHR
*EGY
*IRQ
*JOR
*KUW
*LBN
*LBY
*MAR
*OMA
*
*QAT
*SAU
*SUD
*SYR
*TUN
*YEM

Other states are members of the multilateral Arab Maghreb Union.
*DZA
*LBA
*MTN
*MAR
*TUN

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 as long as groups such as Hamas and Hezbollah continue attacks.

Other negotiations are largely minimized due the existence of current agreements and that there is not a lot of manufacturing industry in Arab states. For the majority of Arab states the economy is 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 tarrifs 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 the 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

* Euro-Mediterranean free trade area (EU-MEFTA)
* List of Free Trade Agreements
* List of Trade blocs
* economic integration

External links

* [http://www.ustr.gov/Trade_Agreements/Regional/MEFTA/Section_Index.html Official US MEFTA website]
* [http://www.whitehouse.gov/news/releases/2004/06/20040609-37.html White House Press Release - 09 June 2004]
* [http://fpc.state.gov/fpc/45701.htm U.S. Briefing at Department of State - 06 May 2005]
* [http://www.whitehouse.gov/news/releases/2005/10/20051017-9.html White House Press Release - 17 October 2005]