Global Policy Forum

By Emad Mekay

The United States said Monday it will negotiate free trade agreements separately with Arab countries as a first step towards setting up a U.S.- Middle East Free Trade Agreement (MEFTA) by 2013 that would include up to 20 of the region's nations.

"Our vision is to foster the revival of a prosperous region once again united by culture, commerce and goodwill among nations," said U.S. Trade Representative Robert Zoellick in a speech on the last day of the high-profile World Economic Forum (WEF) meeting in this resort town on the Jordanian side of the Dead Sea.

Zoellick and U.S. Secretary of State Colin Powell met government ministers from Jordan, Bahrain, Qatar, Egypt, Oman, Morocco, Tunisia, Saudi Arabia, Yemen and the United Arab Emirates (UAE) Monday to discuss steps towards negotiating MEFTA, first announced by U.S. President George W. Bush on May 9.

Powell told reporters that the effort would help create a more stable Middle East based on the strong links between trade and peace in the trouble region.

But many local and international observers view the plans as part of Washington's economic imperialism in the region, which they say is being revealed in the U.S.-led occupation of Iraq, where former President Saddam Hussein's regime fell in April after a three-week invasion.

U.S. multinationals, many with links to the administration of President George W. Bush, are making millions of dollars in contracts to rebuild Iraq under the direction of a U.S. interim authority and, critics say, at the expense of the United Nations, whose traditional post-crisis development role was usurped by Washington.

Arab businessmen were quick to welcome details of the proposed free trade deal. ''This initiative offers potentially huge rewards. But our public and private sectors will need to work together to secure these benefits," said Shafiq Gabr, an Egyptian businessman attending the forum.

But many Arabs here do not see the U.S. trade offer as promising, and view the plan as Washington's attempt to sugar-coat its invasion of neighbouring Iraq, which cost Arab countries billions of dollars in lost trade and potential tourism revenues.

"This (the FTA) is to get Arab countries to swallow the occupation, the killings and the devastation in Iraq that the United States caused," wrote Fahed el-Fanek, a columnist with the Jordanian daily 'al-Rai'.

U.S. Undersecretary of State Alan Larson, said Sunday that Arab countries that want to participate in the free trade agreement would be expected to consider business relations with neighbouring countries, including Israel, whose government still occupies Arab land and is a nation that many people here view with great suspicion.

"If one is aiming to have a region in which there's a great deal of trade and investment across the borders, then it is important to have a region that is not carved into separate little areas. It is important that there'll be trade not only between the Palestinians and the Israelis and between the Jordanians and the Israelis, but with other countries," Larson said.

According to the U.S. plan, Washington will first negotiate treaties with individual countries, to "obligate governments to treat foreign investors fairly and offer legal protection equal to domestic investors".

This, officials say, will demonstrate that these nations are safe places for multinationals to do business.

"If countries want to attract investors, they have to make sure those investors are fairly treated,'' said Zoellick.

The next step would be sub-regional free trade agreements (FTAs) grouping, for instance, the five Gulf council countries -- Qatar, Bahrain, Oman, UAE and Saudi Arabia -- or the Maghreb countries, which include Tunisia, Algeria and Morocco.

The final stage would be a single deal that would likely also include Israel.

Already Washington allows goods from certain parts of Jordan to enter the United States duty free as long as they contain Israeli components.

Washington already has FTAs with the Jewish state and with Jordan, and is negotiating an agreement with Morocco, expected to be concluded by year's end.

Zoellick said the administration was consulting with Congress to launch trade talks with the tiny Gulf state of Bahrain.

To lubricate the negotiating process, officials said Washington would invest one billion dollars in ''trade capacity-building'' in the Arab countries, a term that refers to building institutions and training officials to support the so-called free trade agreements, which have been widely criticised for benefiting Washington more than their partner nations.

Zoellick also said he is offering to work with Saudi Arabia, Lebanon, Algeria, Yemen and other Arab countries that want to join the World Trade Organization (WTO) to "gain full advantage of open global markets''.

Ibrahim Alloush, a Jordanian intellectual and activist, said the proposed Middle East agreement would subordinate Arab economies to major U.S. companies and Washington's policies.

"The agreement uses conditions like 'fighting terrorism' and 'improving investment climate'.'' This means tailoring our local world to the tastes and whims of American companies and interests," said Alloush, who also edits the online publication www.freearabvoice.org.

Jehad Mjahd, a 38-year old agriculture engineer reading news of the agreement at a newsstand in the capital Amman, said the United States will stand to gain more than Arab countries.

"They always attach conditions to anything," he said. "If it is not forcing us into deal with Israel, it's buying American products. And if it's not buying American products, it's about changing our laws or customs. I see no benefit in that.

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