U.S. Middle East Free Trade Initiatives Mean Jobs

U.S.-Middle East Free Trade Initiatives Mean Jobs and Education

(Powell, Zoellick consult further with Arab leaders in Jordan)

By Phillip Kurata Washington File Staff Writer

Dead Sea, Jordan -- The United States has received enthusiastic responses from numerous Arab governments to President Bush's proposal to build a U.S.-Middle East Free Trade Area by 2013, Secretary of State Colin Powell says.

"Everybody sees the linkages between the various issues we've been talking about in the last several days. We want peace in the region, but with peace, you need economic development or the people will not benefit from the peace," Powell said at the World Economic Forum meeting on the Jordanian shore of the Dead Sea June 23.

Bush announced his Middle East Free Trade Initiative at a speech at the University of South Carolina May 9. The initiative, designed to lead to a U.S.-Middle East free trade area within ten years, involves a comprehensive offer to help Arab countries carry out educational, economic, and infrastructure developments to enable them to build free, dynamic economies and raise standards of living.

In 2000, Jordan became the first Arab country to conclude a free trade agreement with the United States. U.S. Trade Representative Robert Zoellick said he expects negotiations for a free trade agreement with Morocco to reach a successful conclusion by the end of this year and similar negotiations with Bahrain to begin in 2004.

Jordanian Minister for Trade and Industry Salah Eddin Bashir said the reforms required to conclude a trade agreement have resulted in a surge of exports to the United States, heightened prosperity, and the creation of tens of thousands of jobs.

In 1999, the year before the free trade agreement was signed, Jordan's exports to the United States amounted to less than $20 million, Bashir said. By the end of 2002, the United States had become Jordan's largest trading partner, and so far in 2003, Jordan has exported about $500 million worth of goods to the United States, Bashir said.

About 70 percent of the 30,000 new Jordanian jobs resulting from the free trade agreement have gone to women, Zoellick said. The trade representative said he and Jordan's King Abdullah planned to inspect a $175 million Jordanian-U.S. joint venture June 23 that had come about as a result of the free trade agreement. He added that the U.S. software giant Microsoft is investing in Jordan and Cisco Systems is establishing an academy for a two-year program in computer training.

Before arriving in Jordan for the economic forum, Zoellick visited Bahrain and sat in at classes at the national Institute of Banking and Finance.

"They are drawing people from all over the Gulf. Their goal is to be not only a financial center but also an educational center" that extends to health services and other areas, Zoellick said.

Zoellick noted that in Morocco the U.S Agency for International Development has made micro-loans averaging $240 to 250,000 people, 54 percent of whom are women.

"This has created a whole new sense of opportunity at the grass roots level. The default rate is less than one-fourth of one percent. There is opportunity throughout the region, both in the private and the government sectors," Zoellick said.

Zoellick said the United States hopes that free trade agreements with individual countries will lead to the gradual economic integration of the Arab world.

"For example, we look toward the possibility of countries in the Gulf joining into the Bahrain Free Trade Agreement, making specialized arrangements for their goods and agriculture but following the basic rules. That would have the benefit of encouraging regional integration, so that the products to qualify would not have to come just from Bahrain but may come from Qatar or Oman or the United Arab Emirates or a combination," Zoellick said.

Zoellick said the economic integration of the Gulf, North Africa or other regions could lay a foundation for a Middle East-wide free trade area.

"That depends on the willingness of governments to undertake these reforms," Zoellick said.

A portion of the trade promotion talks dealt the Palestinian territories, which have not been able to benefit from free trade opportunities with the United States since the mid-1990's because of poor security and access, Zoellick said. He said special efforts will be made to increase trade opportunities for the Palestinians to help realize President Bush's vision of two states, Israel and Palestine, existing side by side in peace and security.

Zoellick said the free trade initiative is a step-by-step approach that involves six phases:

-- actively supporting World Trade Organization membership for peaceful countries in the region that seek it.

-- helping Arab countries expand access to the Generalized System of Preferences, which allows some 3,500 products from 140 countries to enter the United States duty-free. In 2002, nearly $300 million worth of products from the Middle East qualified for this program, including Egyptian furniture, Omani jewelry and Lebanese olive oil, the trade representative's office said.

"A lot more products could qualify," Zoellick said.

-- offering to negotiate Trade and Investment Framework Agreements that establish a framework for expanding trade and resolving outstanding issues. Framework agreements lay the foundation for more complex free trade agreements.

-- offering to negotiate Bilateral Investment Treaties, which oblige governments to treat foreign investors fairly and offer legal protection equal to domestic investors.

-- offering to negotiate comprehensive Free Trade Agreements.

-- targeting assistance to help countries willing to engage in reforms. The United States spends more than $1 billion a year to help Arab countries in trade and development initiatives.

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