U.S. Trade Policies in the Middle East

October 26, 2006
Shannon Murphy

Building economic bridges between the US and the Middle East may be one way to pave the road for positive change in the region. But we need to talk about how we do it. That was the message delivered Thursday by Robert Lawrence, professor of international trade and investment, during a talk in Bell Hall.
Previewing his upcoming book on U.S. trade policies in the region, Lawrence explained the U.S. is currently “seeking to conclude comprehensive bilateral free trade agreements that will be expanded into sub-regional agreements - and ‘within a decade’ into a regional Middle East Free Trade Area.”
In 2003, President George W. Bush and his then-Trade Representative Robert Zoellick, outlined steps for greater U.S. economic engagement in the region, which will ultimately lead to a comprehensive US-Middle East free trade agreement (MEFTA) within ten years.
Lawrence cited six measures that are part of the U.S. approach, noting that the US has been following the approach: actively supporting membership in the World Trade Organization, “for those peaceful countries in the region who seek it”; expanding the generalized system of preferences program to increase US trade linkages with the Middle East; negotiating new trade and investment framework agreements that promote trade and investment, resolving outstanding disputes, and deepening the TIFAs already in place with Bahrain and Morocco; offering to negotiate formal bilateral investment treaties (BITs) with interested countries; negotiating comprehensive FTAs that would be combined into a subregional and ultimately a single MEFTA; and providing financial and technical assistance to help countries fully realize the benefits of open markets.
Lawrence sees “some merit to this approach…it sends a message to the people in that part of the world that we are interested in their financial well-being.” But he also emphasized that the US needs to be careful in the way it does this.
With the Middle East facing ongoing turmoil and strife, mixing political and economic strategies can be very risky, but could also ultimately pay off, Lawrence said. Both the United States and Middle Eastern nations could benefit from improving relations, increasing integration and reducing trade barriers. Lawrence argued that “if political solutions are found, economic policies will have a crucial complementary role to play in addressing some of the underlying sources of conflict.”
Lawrence will officially launch his new book “Expanding the Circle of Opportunity with a US-Midde East Free Trade Agreement” in Abu Dhabi next month. His talk on Thursday was sponsored by the Mossavar-Rahmani Center for Business & Government.

Photo: Doug Gavel

Robert Lawrence image

Robert Lawrence, Kennedy School professor of international trade and investment, discusses U.S. trade policies in the Middle East.

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