(Weekly articles series): Arab countries agreements to facilitate and develop trade exchange – third article, end of the series

Date: 21 - 03 - 2019

Dr..Eng. Ali Mohamed Al-Khouri

Article number 3 and last in this series

What is the way for the common Arab commercial market? Are we on the road, and is there a clear road map for us and for those responsible for trade and economy in the Arab countries to follow to reach this common goal?

In this article, we will try to shed a ray of light on this process in order to learn lessons and lessons from it and how to continue our path and achieve this goal.

In 1981, the Arab countries concluded an agreement to facilitate and develop trade exchange, which is the first contractual framework aimed at implementing the basic principles contained in the documents of the joint Arab economic action strategy and the National Economic Action Charter. However, the agreement was devoid of trade liberalization procedures and mechanisms resulting from implementing this requirement to complete the compensation process and achieve a fair distribution of the gains resulting from the liberalization of intra-Arab trade, which led to the non-activation of the agreement. This was followed by the signing of a similar agreement to guarantee the freedom of movement of the labor market between the Arab countries. However, the shortcomings in implementing the detailed mechanisms and activities in each country separately remained a reason preventing the achievement of the goals of Arab economic integration embodied in the Economic Unity Agreement, the National Economic Action Charter, and the Arab Labor Strategy common.

It is noticeable that most of the Arab countries have focused their intermediary dialogues on developing efforts and measures to facilitate the movement of capital and goods, provisions regulating Arab capital investments in Arab countries, providing guarantees against confiscation or forced seizure, other compensation measures, insurance for invested funds, and guarantees for settling disputes. For this purpose, the Arab Investment Court was established in 1986; Which was practically crystallized and represented in the conclusion of the Amman Arab Arbitration Agreement in 1987.

This was followed by the establishment of the Greater Arab Free Trade Area in 1997, which was activated in 2005. Despite the relative success of this project in the first five years, the process of joint Arab action remained limited in results and fell short of meeting the hopes of the Arab peoples who see that Arab cooperation is what Still lower than it should be. In a field study prepared by the Arab Center for Research and Policy Studies in 2013, the percentage of answers in the opinions of the Arab street and from various Arab countries came skeptical, critical and dissatisfied with the level of Arab economic integration by 65%.

الواقع العربي وأهمية تبني استراتيجيات تغييرية جذرية

In summarizing the above, the comprehensive economic integration roadmap was based on several main stations, namely:

  1. The establishment of a free trade zone, in which tariff and non-tariff barriers are removed, and this stage is still in it and has not been satisfactorily accomplished so far.
  2. The establishment of the customs union, in which a common or agreed tariff is set for goods imported from outside the union, and this stage has not yet been reached, although there are bilateral attempts to apply it to some goods, especially in the Gulf Cooperation Council countries.
  3. The stage of the common market, in which the movement of capital and the labor market is liberalized between the countries of the common market, and this stage has not yet begun.
  4. The stage of economic unity, which aims to unify financial and monetary policies and issue a single currency, and this stage has not yet begun.

It is clear from the four main stages, that the Arab world is still the first stage has not passed it! There are bilateral attempts by some countries to enter the second stage in a limited way, and then no features have begun to start the third stage, let alone the fourth, which represents the real desired goal.

Our comment on this historical process, reading the efforts and following up on the committees that have been working for more than thirty years to activate and put the Arab Free Trade Agreement into full and smooth implementation, is that it did not reach the targeted results, and unless the mechanism of action changes, the results will not change, even if we wait for another thirty years and will even increase. We are ready now to say that the way these committees work will not lead us to our goals?

The mechanisms of trade and customs integration, linking between Arab authorities, requirements for verification of origin, the proportion of local manufacturing, addressing doubts about re-export, and other theses that have obstructed this process can be resolved using technology and open government concepts, and this proposition today has become possible because of the technological development that was not available yesterday. Will the Arab Economic Follow-up Committees re-read the reality in light of these new data?

Dr..Eng. Ali Mohamed Al-Khouri

Advisor to the Council of Arab Economic Unity and President of the Arab Federation for Digital Economy