CAIRO, 17 May 2003 — The United States has inserted a wide-ranging economic component in plans to reshape the Middle East, notably through a proposed free-trade zone and an Iraqi free-market economy.
For US President George W. Bush, the fall of Saddam Hussein last month has created an historic opportunity to establish “a US-Middle East free trade area within a decade to bring the Middle East into an expanding circle of opportunity”.
Speaking at the University of South Carolina on May 9, Bush said that across the planet, competitive markets and free trade had helped fight poverty and allowed populations a taste of freedom. Now he offered such advantages to Arab countries, which Bush estimated had a combined gross domestic product inferior to that of Spain.
Washington has already signed free-trade agreements with Israel and Jordan, and US officials said it was in talks with several other states in the region in a bid to reach a “critical mass” that would lead to a full free-trade zone. That would increase Arab exports to the United States and also favor inter-Arab trade, which remains limited despite a raft of bilateral or multilateral trade agreements.
Moroccan goods imported by Egypt, for example, are slapped with tariffs “ranging from 20 to 100 percent, and which vary according to the mood of customs agents”, a Cairo trader told AFP. The US administration makes no secret of its intention to push Arab regimes toward greater democracy and economic liberalism, particularly in Egypt where an ambitious privatization program has bogged down in the key sectors of banking and telecommunications. With the fall of Saddam, the US-British coalition seeks to create a market-based economy in Iraq to attract investment needed for the potentially lucrative post-war reconstruction phase. The country could see dramatic changes in the next five years, said British diplomat Simon Elvy, designated by the coalition as advisor to the Iraqi Planning Ministry. He added that Iraq should move away from the centralized planning model that saw state industrial and oil firms make up 75 percent of gross domestic product estimated at $28 billion.
Washington is trying to prod the UN Security Council to lift an embargo on Iraq in place since its 1990 invasion of Kuwait and replace it with an Iraqi Assistance Fund fed by oil revenue. The United States also said Wednesday there was no question of simply canceling Iraq’s debts, estimated at around $400 billion. “I assured delegations today that our resolution is not intended to address the question of Iraq’s external debt,” the US ambassador to the United Nations, John Negroponte, told reporters in New York.