Call me old fashioned, but I believe in Arab unity. Yes, I know all the counter-arguments that are the norm these days in every dinner party in every corner of the Arab world. Arab unity, many “pragmatist” Arabs love to proclaim, is just a dream that was shattered by the failure of the Pan-Arab project in the 1950’s and 1960’s, culminating in the defeat of 1967, and, more recently, by the Iraqi invasion of Kuwait. here are a multitude of responses that can be made to such claims. I can point out that Arab unity is not some fancy idea that blows in the direction of every passing political event; it is an issue of identity rooted in language and history, two of the most important constituents of nationhood. But, more importantly, the pitch for Arab Unity in the 21st century must be economic.

Arabs cannot remain impervious to the realities and demands of the global economy. The removal of trade barriers, the growing importance of multinational companies and the developing consensus against national protectionist policies are a few of the trends leading to the development of regional economic blocs. This is reflected by the growing influence of trading blocks such as The European Union (EU), the North American Free Trade Area (NAFTA) and the Association of South Eastern Asian Nations (ASEAN). Even the GATT/WTO rules provide for economic regional blocs.

There is a palpable necessity for nation states to form regional groups that will compete more effectively in an economy that is more free and global than at any other time in human history. No nation state can happily float as an isolated island and hope to succeed in this new economic reality. In other words, if the concept of Arab unity did not exist, we would have had to invent it.

It is no coincidence that the world’s most developed economies have the highest inter-regional trading figures. For example, inter-regional trade amongst European countries represents over 60% of Europe’s worldwide trade, and inter-regional trade among Asian countries exceeds 30%. As for inter-regional Arab trade, it represents a derisory 9 % of Arab countries’ overall trade (figures quoted by the Trade and Industry Journal, Dubai, September 1998, Volume 23 - Number 272). In 1990, whilst its inter-Arab trade only amounted to 10% of its overall trade figures, Saudi Arabia imported products from Japan, US and the UK worth US$ 21.5 billion, and its exports to the same countries amounted to US$ 28 billion (figures quoted by the American University of Cairo). This is an imbalance which is repeated across the Arab world.

Arab countries, through the Arab League, have made several failed attempts over the past 50 years to achieve economic integration.There was the 1957 Agreement of Economic Unity, the 1964 formation of he Arab Common Market, and the 1981 Facilitation and Promotion of Inter-Arab Trade Agreement (the “Facilitation Agreement”). But justwhen we thought all of these agreements were destined for history’s scrap-heap, the Facilitation Agreement went and staged an astonishing comeback.

The main objective of the Facilitation Agreement, signed by all members of the Arab League, was to free all goods traded between Arab countries from all custom tariffs and non-tariff trade restrictions. However, the enforcement of this Agreement was subject to the enactment of an implementing schedule. This schedule was ignored for 16 years, but then, with most Arabs barely noticing, 18 members of the Arab League enacted this schedule in February 1997 (only Algeria, Mauritania, Djibouti and Comoros did not sign). The full name of this schedule is a bit of mouth-full: “The Implementation Schedule of the Facilitation and Promotion of Inter-Arab Trade Agreement to Establish an Arab Free Trade Zone.” In brief, this is known as the Arab Free Trade Zone Agreement (AFTZA).

AFTZA stipulates that all custom rates and duties applied on Arab products traded between the signatory countries shall be reduced at an annual rate of 10% starting 1 January 1998, until all rates and duties are phased out by 31 December 2007. AFTZA further stipulates that “Arab products” that are traded in the framework of the Agreement “will not be subject to any non-tariff barriers whatsoever.” The Agreement contains various other provisions aiming to establish greater Arab economic integration. For example, there are provisions establishing the National Treatment Principle (each Arab country is bound to subject all Arab-origin goods to the same treatment given to its own goods), the harmonized system (HS) of custom classification, and standardized rules of origin for goods falling within the scope of the Agreement.

AFZA has thus far been ratified by 13 of its 18 signatory countries (Jordan, Syria, Iraq, United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, Kuwait, Morocco, Tunisia, Egypt, and Libya). Furthermore, countries like Jordan, Lebanon and Egypt have availed themselves of the AFTZA provision sanctioning separate bilateral and multilateral agreements to accelerate the creation of the Arab Free Trade Zone. For example, as of January 1, 1999, all custom duties and rates applicable on products traded between Egypt and Lebanon have been eliminated.

This is a momentous development, and accolades are due to all those who helped pull it off. AFTZA has bound nearly all Arab countries to the goal of an Arab Free Trade Zone, with unfettered free movement of goods, by 31 December 2007. And unlike its predecessors, AFTZA has specified a mechanism for the gradual creation of this Zone which is being applied on the ground by 13 Arab countries. This is an excellent step in the right direction, the direction of complete Arab economic unity.

The challenge now is to ensure the application of AFTZA and to work towards the acceleration of the creation of the Arab Free Trade Zone. Over the past 50 years, attempts at greater economic integration amongst Arab countries have failed mainly due to the lack of political will. Due to reasons that are beyond the scope of this article, many Arab governments have in practice stalled moves towards Arab economic unity, while in rhetoric they kept on playing the pan-Arab record.

In fact, slogans of pan-Arabism are repeated so often in the Arab press that the pan-Arab argument has lost its allure. Words of unity ring hollow with Arabs now, because they are simply sick of endless speeches trying to make flippant political capital of a concept that once made us all dream. This is perhaps why AFTZA has thus far gone unnoticed. It is simply amazing how many Arabs I have come across who have never even heard of it. Those who know about it tend to smile cynically when it is mentioned; it’s all words on paper, as far as they are concerned.

After years of meaningless sloganeering about pan-Arabism, I do not blame Arabs for their skepticism about AFTZA. But the fact remains, this is the most tangible step in the past 50 years towards real economic integration. It is now for the people to protect it. We have to keep talking about AFTZA and monitoring its application. We have to make it clear to our governments that we congratulate them on this step and that we want them to continue down this track. It is for us to ensure that the political will behind AFTZA does not wane.

Also, AFTZA needs a leader. Where is the Kohl or Miterrand behind this Agreement? The field is clear for a prominent Arab leader to articulate the political speech underlying AFTZA. The excellent work of the Arab league’s committees and personnel who made AFTZA a legal reality must now be rewarded by an Arab political leader who will ensure that this Agreement becomes a political and popular reality.

For there are many potential problems that may yet scupper this promising project. Firstly, under the terms of the Facilitation Agreement, which forms the basis of AFTZA, there is a mechanism which Arab countries can use to claim exceptions from the application of the lower tariffs and the removal of non-tariff barriers stipulated in AFTZA. If many Arab countries decide to claim exceptions for many of their products, AFTZA would soon turn into a lame duck. Secondly, AFTZA calls for the creation of a committee that would resolve disputes regarding its application. According to my information, this committee has not yet been established. Thirdly, AFTZA does notestablish any sanctions that would apply against a non-compliant country. Fourthly, five of the 18 signatory countries have not yet ratified this Agreement, not to mention the four Arab countries who did not sign it altogether.

All of these could prove to be fatal pitfalls. As already stated, the only guarantee against the decline of AFTZA is an iron political will forged by the people and articulated by committed Arab leaders. Such a will would work towards transcending all potential obstacles and ensuring that AFZA is applied by all Arab countries in an unmitigated manner. And, if I may allow myself to dream a little, this political will may end up unleashing a drive towards greater Arab integration: acceleration of AFTZA for all Arab countries based on the Egyptian/Lebanese model? Free movement of people across Arab frontiers? Anything is possible.

Tags: economy, pan-arabism