Arab Common Market

Arab common market: The possibility of realization, Part 1 Regional, Analysis, 5/10/1999The starting point of an Arab market ought to proceed from launching and expanding programs of structural reform inside each Arab state in a way that makes available all the conditions needed for such programs to be accomplished with high efficiency, brings about real changes in the nature of the relationship between public authorities and economy, and defines the role of the state generally so that care can be accorded in particular to liberalizing the exchange rate, the interest rate, pricing of commodities and services, openness in trade through decreasing customs and administrative barriers to imports and exports, and at the same time cutting down subsidies and consumption, rationalizing government spending and really reforming the monetary and taxation systems. In agriculture it was found out that it is highly significant to see misconduct abandoned, which is the result of the state’s intervention in the agricultural production relations, that the state’s role should be confined to improving legislation pertaining to the agricultural sector to suit the economic changes affecting the other sectors, developing agricultural resources through programs of land reclamation and building dams, giving up the policy of intervening in determining the prices of agricultural products and recognizing the freedom of market mechanism to strike balance in the economy.In terms of privatization, the state organizations of this sector can be on the market, buying or selling to achieve a stable income for the farmers and reduce the differences in price fluctuation affecting crops, which goes in line with the nature of agricultural activity, characterized by a distance from the centralized economy, considering certain characteristics of this sector such as private ownership, numerous production farms and their geographical distribution. The next step should be liberalizing exchange with the external world. This policy must be built on realizing the power of competition within the framework of freedom of external exchanges.

The process of liberalizing trade should not end at a certain category of commodities, it should be expanded to cover all exchanges related to commodities or otherwise. However, the aforesaid two steps pave the way for the conclusion of bilateral or multilateral agreements.Studies show that trade exchange between countries that are parties to bilateral and multilateral economic agreements recorded a more remarkable increase than the previous periods. Thus trade agreements between Arab states play a positive role in promoting inter-Arab trade, notwithstanding the fact that there are cases when such agreements have a small or limited effect. These accords are a strong support for the efforts exerted in the direction of achieving Arab economic cooperation and integration. Trade accords are a bridge for inter-Arab economy cooperation, which is required as a preliminary stage for a common Arab market. They are, moreover, more dynamic, in this stage more than any other measure for liberalizing Arab trade and for surmounting, or easing, certain impediments of a political nature.

Afterwards, there might be an inclination towards the formation of regional Arab economic blocs such as the Gulf Cooperation Council and the Arab Maghreb Union. These blocs might be the nucleus of the aspired Arab common market. The blocs might be four, for instance, instead of two: the first groups the states of the Arabian peninsula, the second to group the states of greater Syria and Mesopotamia that have one common civilization throughout the ages, the third to link together the states of the Nile Valley which could include beside Egypt and Sudan, the states of Eritrea, Somalia and Libya, and the fourth bloc would have the states of the Arab Maghreb Union (Tunisia, Algeria, Morocco, Mauritania and the Libya).This distribution can be justified by the similitude’s existing among the states of each group such as the patters of consumption; the natural and climatic circumstances; the nature of agricultural, industrial and services production; and the similar standards of development of the infrastructures. The geographic location is also a basic factor in the distribution of inter-Arab trade. The dealings in Saudi Arabia’s imports are with the Gulf states, Syria, Lebanon, Jordan, Somalia, Sudan, Egypt and Yemen amount to 92% of its imports. Egypt imports from Sudan the equivalent of 62.

2% of its imports. Algeria imports more than 55% of what it needs from Tunisia and Morocco.Jordan’s imports come mainly from Syria, Iraq, Lebanon, and Egypt, which combined give more than 84% of its agricultural imports. Tunisia’s imports are centered in Morocco, Libya, Egypt and Sudan, from which the country gets about 62% of its overall agricultural imports. Sudan gets 79% of its imports from Saudi Arabia and Egypt. On the same level, exports from Syria, Jordan, Saudi Arabia, the Gulf states and Lebanon constitute 89% of their respective exports. Jordan’s exports go mainly to Saudi Arabia, the Gulf states, Syria, Iraq and Lebanon in the equivalent of 96% of its overall agricultural exports to Saudi Arabia, Egypt and Yemen.

For Egypt, the markets in Saudi Arabia, Sudan and Libya take around 60% of its exports.Tunisia exports 51% of its agricultural products to each of Algeria, Morocco, Libya and Sudan, and if its exports to Syria are added then this percentage jumps to 74%. Morocco’s exports to Algeria, Libya, Tunisia and Egypt combined amount to 46%, and if Morocco’s exports of fertilizers to Saudi Arabia are added, the percentage goes up to 83% of its total exports. Algeria’s exports to Arab states are almost nil, hardly reaching 2% of its overall inter-Arab agricultural exports, concentrating on the markets of Morocco, Tunisia and Mauritania. Previous Stories: Cairo hosts Arab electricity ministers meeting   (4/22/1999)   Arab finance ministers meet in Doha on Arab free trade zone   (4/21/1999)   Arab trade and industry chambers union meets in Lebanon   (4/9/1999)