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LETTER FROM THE EDITOR

FTAs and Arab brotherhood

Deputy Secretary of Commerce Samuel Bodman of the United States argues that the best, if not the only, way out of the crisis that has beset the world for the past year is for countries to lower their trade barriers, to allow the formation of stronger trade links and spread prosperity. “The only effective way to deal with the root problems is to expand world trade,” Bodman told members of the American Chamber of Commerce in Egypt (AmCham Egypt) at a meeting on September 22.

He could have had an engaging discussion with Iraqi minister of trade Mohamed Mahdi Saleh, who was in Cairo just a few days earlier to attend an Arab League economic conference and talk to Egyptian officials about bilateral trade. Saleh also presided over the opening of a trade fair for Iraqi goods at the international fair grounds in Nasr City.

The Iraqi trade minister was blunt about the overtly political purpose of his visit, saying that a deepening of trade relations would build Arab solidarity and strengthen opposition to a US-led attack on Iraq.

Both officials see the expansion of international trade as the best way to preserve the safety of their respective countries. In Iraq’s case, the government has been signing free-trade agreements prolifically during the past two years. Eleven Arab countries – including North African, Levantine and Gulf states – have signed such treaties since 2000, thus expressing a commitment, in principle, to trade freely with their beleaguered Arab brethren.

While Iraq remains under sanctions, the UN oil-for-food program has allowed significant levels of trade to go on with fellow Arab states, whose support Iraq now hopes to call in to counter moves by the United States to justify an invasion. Some of Iraq’s immediate neighbors also, no doubt, appreciate the benefits of the mini-economies that have arisen through years of sanction busting.
The United States has been more tight-fisted with its free-trade agreements. As Bodman noted, the world has 190 bilateral and multilateral trade agreements, but only three are of the much-coveted US Free Trade Agreement (FTA) variety. Deputy commerce secretary Bodman underlined the importance to the United States of signing more FTAs, though only with countries whose economic and legal structures would permit truly fair and open trade.

US trade representative Robert Zoellick, the official actually charged with concluding FTAs, has spoken openly about the fact that the agreements are dispensed partly as a political reward to loyal friends and allies. He, too, however, stressed that the ultimate goal was to break down trade barriers worldwide.

Except for the defense and petroleum sectors, a US invasion of Iraq could only be ruinous for trade in the Middle East. Bodman, at the AmCham Egypt meeting, said that President George W. Bush had “not made up his mind” about invading Iraq, and added that the president would take the input of the commerce department into account in any major decision affecting the region.

If Bodman and Saleh had scheduled a chat while in Cairo, they might have seen eye to eye – on issues of trade, if nothing else. And on briefing their respective superiors afterwards, they might – who knows? – have averted a cataclysmic regional conflict. Maybe a US-Iraq FTA isn’t on the horizon, but on some levels, officials in the two regimes seem to think alike.

Neil MacDonald

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