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Arab League: Common market in 6 years, customs union next year

November 24, 2014 at 5:36 pm

Secretary General of the Arab League Dr. Nabil Elaraby said the organisation has taken steps toward launching the Arab Common Market (ACM) in six years.

In August 1964, the Council of Arab Economic Unity decided to establish the ACM, but the decision was never implemented due to legal obstacles among member states, as well the absence of political will.

The long-term goal of the ACM was to establish a full customs union that would abolish—amongst its members—trade restrictions, trade quotas, and restrictions on residence, employment, labour, and transportation.

During his speech at the 16th Conference of Arab Businessmen and Investors held in Cairo, Elaraby said that the Arab League had started to put rules for the customs union through agreements that are being set in coordination with member states. The Arab customs union would be launched in 2015, he said.

The plan to establish the Arab customs union in 2015 was announced in 2009, during the Arab Summit for Economic and Social Development in Kuwait.

The Assistant Secretary General of the Arab League Dr. Mohammad Bin Ibrahim Al-Tuwaijri said in August he expected intra-Arab trade to reach 70% of member states’ total external trade, especially after the launch of the Arab customs union.

He noted that intra-Arab trade among member states currently does not exceed 10% of Arab states’ foreign trade due to obstacles that hinder the flow of trade between Arab countries.

Elaraby said that the Arab League is currently working, in coordination with member states, towards eliminating obstacles to this flow. He also said that many treaties have been amended to aid this.

The 29th annual report on the climate for investments, which is issued by the Arab Investment and Export Credit Guarantee Corporation (DHAMAN), stated that intra-Arab trade was particularly harmed by the security and political developments that have been taking place in the region since 2011. DHAMAN’s report notes that the size of intra-Arab trade has significantly decreased – from $6.8 billion in 2011 to $1.8 billion in 2013.

Elaraby called for the establishment of large Arab projects that could boost development in the region. He said that the Council of the Arab League had previously discussed the need to maximise the use of renewable energy and reinforce cooperation in this field, in collaboration with the private sector.

The population size of all Arab countries is estimated to be more than 350 million, whereas the Arab workforce is estimated to be 112 million. Arab GDP is just above $1 trillion. The Arab world has 59% of the world’s oil reserves and 29.4% of confirmed natural gas reserves.