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Al-Ahram Weekly 1 - 7 April 1999 Issue No. 423 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 1 - 7 April 1999 Issue No. 423
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Interview Profile Features Travel Living Sports People Time Out Chronicles Cartoons Letters Growing pains for Arab trade
by Mona El-FiqiMovement toward setting up an Arab free trade area (AFTA) is still encountering obstacles, namely those relating to the definition of goods of Arab origin, the insistence by some countries that a number of industrial products be excluded from the agreement and the cumbersome bureaucratic procedures that exist in some Arab countries.
In January, Egypt and 13 other Arab countries implemented an agreement to cut tariffs on goods traded among themselves by 10 per cent. This was a further reduction on a 10 per cent cut that came into effect last year. AFTA is considered an important step towards establishing an Arab common market.
So far, 14 Arab countries, Egypt, Syria, Libya, Tunisia, Lebanon, Jordan, Morocco, Iraq and the six Gulf Economic Cooperation Council countries, have signed up for AFTA. Imports and exports from these countries constitute 90 per cent of total inter-Arab trade.
Kamal Sinada, deputy director of the general department for economic affairs at the Arab League, said other Arab countries have not joined the AFTA arrangement because they "need more time to develop and to be able to implement AFTA's programme".
Although an Arab trade enhancement agreement endorsing an immediate tariff exemption for Arab agricultural exports was signed in 1981 by 18 Arab countries, it was not put into effect because of the political and economic events in the region. In 1996, the Middle East and North Africa (MENA) summit held in Cairo recommended that the trade enhancement agreement be activated.
In response, the Economic and Social Council of the Arab League set up a programme to ensure the agreement came into effect. The programme, which took into account the economic differences between Arab countries, drew up a tariff exemption schedule to be implemented over a 10-year period. Each country would implement a 10 per cent reduction annually until December 2007, when those countries could trade goods among themselves on a duty-free basis.
"We expect the AFTA arrangement to meet with resistance from the private sector and some government departments," said Sinada, adding that groups with vested interests might try to hinder the implementation of the agreement. "They tried to delay AFTA, for example, by requesting that certain industrial products be excluded from the agreement," he said.
Most Arab countries have submitted a list of products they want excluded from tariff reductions to the Arab League. Egypt, for one, has proposed the exclusion of textiles, vehicles, ready-made clothes and poultry.
Sinada said that according to the Arab League's programme, each country has the right to exclude a number of industrial products, but only if it can prove that the tariff exemption would harm local production.
"The League's AFTA committee has not approved any of the proposed lists, but these will be discussed at its next meeting," said Sinada, adding that the League does not want the exemption lists to be expanded. This, he said, would defeat the purpose of AFTA.
According to programme, each country has the right to exclude some agricultural products from the agreement. A maximum of 10 products can be excluded, for a period of 40 months.
Only products of Arab origin will be eligible for exemption, but the problem is that there are currently no common rules defining origin. "The Arab League has set a general standard of origin, which stipulates that at least 40 per cent of the material used in the product should be of Arab origin, but the certificate of origin can be easily forged," said Sinada.
The Arab Economic and Social Council has commissioned the Arab Organisation for Industrial and Agricultural Development to draw up a detailed standard for certificates of origin, which will be applied to Arab exports from February 2000.
Furthermore, Arab exporters complain that before being granted a reduction in customs duties, they have to go through a number of long, drawn out bureaucratic procedures in the countries they want to export to.
Sinada said the inefficiency of customs authorities in most Arab countries has not only affected inter-Arab trade, but international trade relations as well. To help solve this problem, the Arab League has recommended that the Arab Organisation for Administrative Development help customs authorities upgrade their procedures and eliminate red tape.
