Technology for Oil – Why America Wants Free Trade with the Arab World!
Taqrir Washington Sherif Othman
In a May, 2003 address in South Carolina, in a recognition of the economic troubles facing the Arab world, President Bush said that, "The Arab world has a great cultural tradition, but is largely missing out on the economic progress of our time.” The Administration then expressed its desire to establish a free trade area within the next 10 years that would give people in Middle Eastern countries hope through better economic opportunities. American trade representatives have begun intensive negotiations with many Arab countries to reach bilateral agreements on the issue of free trade. The former U.S. Assistant Trade Representative for Europe and the Mediterranean Sea, Catherine Novelli, said that, “those agreements cover all products, and according to it, all restrictions are removed except those related to customs tariffs”.
This month the US took another step in the same direction, concluding a number of free trade agreements with several Arab countries, including Oman. These agreements aim at removing customs tariffs and other restrictions that hinder free trade between countries. Oman is the fifth Middle Eastern country to have negotiated a free trade agreement with the U.S. The U.S. has concluded free trade agreements with Israel, Jordan and Morocco, and there are negotiations under way with United Arab Emirates to reach the same agreement. Congress has ratified free trade agreements with Israel, Jordan, and Morocco, while an agreement with Bahrain remains in Congress and is expected to be issued by the end of 2005.
What are these Agreements?
Free trade agreements are comprehensive, high-level agreements that tackle important issues like the transparency of information and data flows (especially trade information), the sovereignty of law, battling corruption, and protecting intellectual property, which is among the most important priorities in the 21st century. These agreements support efforts for economic reform, and represent the last in a series of steps taken to create freer markets in countries of concern. Middle Eastern countries have around 350 million people whose commercial relations with the U.S. are worth more than $70 billion when the latest crude oil prices are reevaluated.
These kinds of agreements were not the only ones concluded with Middle Eastern countries. The U.S. has signed bilateral trade and investment agreements with Tunis, Qatar, Saudi Arabia, Kuwait, Yemen, and the United Arab Emirates. These agreements usually represent the first step toward negotiation on free trade agreements, as happened with the United Arab Emirates. They currently provide a mechanism for resolving economic problems that may arise between the two countries.
American Objectives
The U.S. is working aggressively to open markets globally, regionally, and bilaterally to expand American opportunities. Few goods were reaching foreign markets for various different reasons, including restrictions on international trade. Under President Bush the U.S. has concluded 12 free-trade agreements. Agreements are currently underway with 11 other countries. Considered as a whole, these new markets will represent the third biggest market for American exports, and the sixth biggest economy in the world.
Though signing agreements such as these was considered before September 11, the new impetus for concluding free-trade agreements stems from recommendations found in the 9-11 Commission Report. The report included economic recommendations for the creation of freer markets and societies that would in turn create opportunities for people to improve their standards of living and to guarantee better futures for their children. The report indicated that such developments need to be part of any American strategy to combat terrorism.
Based on these recommendations, the U.S. has focused on concluding free trade agreements with Middle Eastern countries by 2013 as a supplementary step in its efforts to encourage reform in the region.
Through these agreements the U.S. is trying to include Islamic countries, which is sees as the primary source of terrorism, into the international system of trade by canceling restrictions on trading with poorer Arab countries. Foreign trade is one of the U.S.’s foreign policy priority tools for influencing the way people think in the Arab and Muslim worlds. The U.S. believes that, through the development of trade, one will know more about other people’s morals and way of life. Trade may also expose people to different patterns of consumption, as well as expose them to different conceptions of freedom as they exist in other countries and societies. According to the U.S., exposure to such phenomena might help people who are haunted by “fanatic Islamic ideas” to make different choices.
The U.S. is not the first to have recognized the benefits of trade. In fact, some of these ideas on the various benefits of trade came from Muslims. Islam reached Africa and Asia through trade, which was the key to people’s hearts and minds in these remote areas. In the same way, the U.S. hopes to make use of trade as part of the solution to what it sees as a fundamentalist dilemma in the Middle East.
American Optimism
The economic ambitions of Middle Eastern leaders have made U.S. trade representatives very optimistic. As the number of young people entering the work force increases, leaders in these countries are concerned about adopting an economic system that can generate the required job opportunities. The pattern for accomplishing these agreements will be based on the requirements of the World trade Organization (WTO). The U.S. supports countries that fulfill its commitments to the WTO and its member countries.
In addition, the U.S. will grant concessions to low- and medium- income countries that liberalize trade. The most significant of these concessions will take the form of customs-free exports of commodities into the American market that may exceed 4650 products. These concessions depend on economic development in a given country, its commitment to the liberalization of trade, and its respect for intellectual property rights and workers' rights. The U.S. will further negotiate bilateral investment agreements to guarantee equality between foreign and domestic investors and a commitment to international laws and investment norms. It will offer a trade and investment framework under which a large part of the bilateral negotiations will be discussed, in an effort to define both the opportunities for and barriers to investment. Discussions help to define the objectives of the concerned state, and provide an opportunity for the U.S. to explain both how it can aid the state in achieving its objectives and how bilateral agreements can become free-trade agreements.
When both countries reach a decision concerning a free-trade agreement, 13 different groups automatically begin work on different aspects of the envisioned agreement, resulting in a final draft agreement that usually contains hundreds of pages. Agreements are sent by trade representatives to Congress for review and ratification. Congress normally has a long list of concerns that need to be discussed, including the protection of foreign investments, clear and defined steps for governmental purchases, and protection for intellectual property and workers' rights. Free trade agreements are rigorous and are subject to strict legal and economic requirements, but the result is that a country ultimately gains access to the markets of other countries.
