U.S. and Arab officials Tuesday spoke in favor of freer trade and economic reform at a Washington forum sponsored by the Center for Strategic and International Studies (CSIS).
Jordan's ambassador to the United States says Arab countries need to create 100 million new jobs in the next 15 years just to hold the unemployment rate at current levels. The Arab countries have young populations and high birth rates. The Jordanian official said the best way to create jobs is to boost trade and attract foreign direct investment.
This sentiment was echoed by Egypt's ambassador to Washington, Nabil Fahmy, who said his country is pursuing market based reform in order to boost economic growth to six to eight percent annually. Mr. Fahmy regards competition and freer trade as key components of Egypt's growth strategy.
"So one of the main reasons we're interested in an FTA [free trade agreement with the United States] is to energize our own reform process back home,” he said. “And to put it on a solid basis that will sustain shocks that are naturally going to happen when you move from a centralized to a market economy."
Egypt's state dominated economy has been characterized by generous subsidies, protection from imports, heavy regulation and bureaucracy.
Economic and political reform in the Middle East has been endorsed by the leaders of Western Europe, Russia, North America, and Japan. And for the second year running it will be a centerpiece of their annual Group of Eight summit. Economic reform lags throughout the Middle East and only a few Arab countries are members of the trade promoting World Trade Organization (WTO). Assistant US Trade Representative Cathy Novelli says Washington is stressing the benefits of WTO membership.
"We are actively engaged in helping countries accede to the WTO who are not in the WTO because obviously that is a foundational element of how you can move up the chain of economic reform and trade policy reform,” she explained. “And the countries we are working with are Saudi Arabia, Iraq, Lebanon, and Algeria."
The United States has concluded bi-lateral free trade agreements with Israel, Jordan, Morocco and Bahrain and is pursuing agreements with Oman, the United Arab Emirates and Egypt.
