U.S. Trade Relations with Arab Countries: Past, Present, and Future

Abstract

Abstract Arab countries have adopted market economy principles and pursued policies designed to strengthen their economies. The cornerstone of Arab countries' long-term economic objectives has been to increase trade and support economic growth via regional and global integration. To this end, Arab countries are attempting to broaden their engagement in the multilateral trading system by joining the World Trade Organization (WTO). In addition, some Arab countries entered into trade arrangements with the United States (U.S.) to foster economic development, attract investment, and develop peaceful relationship. These trade agreements carry several implications for local economies.The purpose of this paper is to examine the implications of the trade agreements signed between the U.S. and Arab countries on the economic and legal regimes of the latter. The paper will proceed in two main parts. The first part analyzes the preferential trade arrangement known as "Qualifying Industrial Zones" created between the U.S on the one hand and Jordan, Israel, and Egypt on the other hand. It discusses the general rules of qualifying industrial zones program and the impact of these zones on local production and employment. The second part discusses trade agreements concluded between the U.S. and Arab countries. The emphasis will be on the U.S.-Jordan Free Trade Agreement as it is considered the template for future agreements signed between the U.S. and other Arab countries. The paper analyzes the most important provisions of the U.S.-Jordan Free Trade Agreement and their implications. Then, the paper will analyze trade agreements between the U.S. and other Arab countries. The paper argues that, while current trade programs between the U.S. and those Arab countries analyzed in the paper required difficult reforms in their domestic laws and led some negative consequence, on balance; these trade programs increased trade and created employment opportunities.