Trade Integration and Development in Arab Countries

Given the Arab countries membership in the League of Arab States, which represents a form of confederation among its 22 member states, and considering the shared language, borders, historical, cultural, and social elements, as well as the growing trade interactions between southern nations, the need for integration has become essential to strengthen the competitiveness of these countries in global markets in recent years. Through regional economic integration, Arab countries will be able to combine their capabilities, natural resources, and assets to foster productivity, development, transformation, job opportunities, and increased investment. This is achieved by minimizing distortions, expanding markets, and instilling confidence in economic and political reforms. Over the long term, the objective of establishing a trade zone and customs union is to attain an Arab economic union that operates with comprehensive economic, monetary, financial, social, and sectoral policies. This union aims to ensure economic development and growth, thereby enhancing the region's position in the global economy and strengthening its integration into global value chains.

Within this context, the endeavor to establish a connection between intra-trade and development in the Arab world necessitates shedding light on the performance of economic integration within the region. It also entails examining the advantages and disadvantages of liberalizing intra-trade, and its impact on the development of Arab countries. Given the prevailing conflicts among regional countries and their unprecedented levels of fragmentation, particularly in Iraq, Libya, Syria, and Yemen, it may not be politically opportune to propose the notion of achieving comprehensive regional integration at this time. Hence, it becomes necessary to put forward alternative solutions appropriate to the context.

The fundamental question that this study seeks to address arises from this situation. It aims to determine whether the trade agreements established within the framework of the Greater Arab Free Trade Area and the subsequent reduction of customs barriers among regional countries have indeed facilitated the enhancement of internal exports and imports. Furthermore, it explores whether the different stages of intra-trade liberalization have resulted in increased real GDP growth rates. Within this context, it is essential to evaluate the implications of joining the World Trade Organization, the Greater Arab Free Trade Area agreement, the Gulf Cooperation Council, the Arab Maghreb Union, and various bilateral trade agreements. Were these measures effective in attracting investments that drive the process of growth and development? Has the removal of trade barriers between countries and the promotion of trade and growth reached the desired level?

Hence, the following sub-questions are raised:

• To what extent are bilateral, interregional, and regional economic integration agreements prevalent in the Arab region? How effectively do these agreements impact inter-Arab trade?
• To what extent have these agreements proven effective in fostering the development of local economies? How can the tools of Arab economic integration be enhanced to further promote economic integration?

This research seeks to examine the effectiveness of Arab economic integration and its impact on development. Its primary objective is to crystallize an alternative perspective, distinct from the conventional neoliberal viewpoint, for the upcoming phase. The significance of this study lies in its emphasis on economic integration, which has been rapidly advancing in recent years, as a crucial element in the process of development. Understanding its role in reducing unemployment rates, promoting equality, and alleviating poverty in member states of the integrated region is essential.

Consequently, the research aims to achieve the following objectives:

1. Identifying the reality of economic integration in the Arab region.

2. Clarifying restrictions and obstacles facing Arab Economic Integration.

3. Linking economic integration and development.

4. Elucidating the effects of economic integration experiences on development in the Arab world.

5. Evaluation of the integration path.

Download the full report ’Trade Integration and Development in Arab Countries“ by Dr. May Hammoud. The report is available in English and in Arabic.

Source: Arab NGO Network for Development (ANND).