The economic effects of the accession of Arab countries to the World Trade Organization

The member states of the World Trade Organization had agreed to hold their ministerial meeting in Doha, the capital of Qatar, in early November of 2001. This was the first meeting at this level after the disastrous meetings held by the organization in the American city of Seattle in 1999, as well as the joint meeting Between the International Monetary Fund and the World Bank in the Czech capital Prague in 2000, where the two meetings witnessed widespread unrest and protests, by anti-globalists. Some anti-globalization parties condemned the WTO’s decision to hold the meeting in Doha, saying that the WTO deliberately chose Doha because Qatar is a country that is difficult to enter for protesters and opponents, where entry visas are governed by strict and very restrictive rules.
What are the most important economic effects of the Arab countries accession to the World Trade Organization?
Will this meeting take place at the specified place and time,´-or-will circumstances prevent it?
A question looking for an answer. But before answering this question, we will talk about the most important economic effects of the accession of Arab countries to the World Trade Organization.
The Arab countries that signed the GATT agreements after the Uruguay Round were-limit-ed in number, namely: Egypt, Tunisia, Kuwait, Morocco, Mauritania, Bahrain, the Emirates, and Qatar. However, the developments that have taken place´-or-will happen in international economic relations have made some Arab countries reconsider Its position on trade liberalization and openness to world markets, so it is expected that other Arab countries will join the World Trade Organization. It is expected that the implementation of the Uruguay Round Agreement will have positive´-or-negative effects on the economies of the Arab countries. It is also expected that these effects will differ from one country to another, depending on the different economic system, different production structures and their position on these agreements. Among the most important expected effects at the sectoral level of the Uruguay Round agreements Those effects associated with the gradual liberalization of trade in agricultural and industrial goods´-or-in trade in services.
We have to distinguish between two types of results resulting from the application of GATT agreements to the global economy, especially the economies of developing countries and Arab economies: The first type - results that are considered confirmed facts represented in the actual results of the GATT rounds negotiations, especially with regard to customs reductions under the national tariff schedules and service offers and their contents. of pledges. The second type - results represented by inferred estimates, which deal with the impact of trade liberalization on global income and international trade flows. These estimates are subject to many influences, and it is not possible to include all of them in the assessment because they are non-quantitative influences that are related to the future performance of the global economy and its efficiency in general.
Multilateral agreements on trade in goods:
(It is expected that the implementation of the Uruguay Round Agreements will increase trade exchange and contribute to achieving higher growth rates in the global economy. Multilateral agreements on trade in goods would lead to an increase in production capacities due to the removal´-or-reduction of tariff and non-tariff restrictions on imports and would enhance the capabilities of It is also expected that opening the markets of the developed countries will give the developing countries the opportunity to specialize in production and export on the basis of comparative advantage).
Liberalizing imports leads to the expansion, development and modernization of the production base, and works to reduce production costs and improve productivity and quality to compete with foreign products. Arab countries must adhere to international standards of quality and specifications, especially the ISO 9000 system, which has become accepted and recognized internationally. The implementation of the GATT agreements by Arab countries pushes producers to speed up the development of their production projects, and this will reflect positively on socio-economic development and increase the volume of exports and thus increase the national income. In the event that Arab countries accede to the GATT agreements, they must have obligations that are matched by the rights:
Obligations:
A. Commitment to the general principles of the GATT agreements.
B. Approval of the results of the Uruguay Round, especially the 28 agreements signed at the Casablanca Conference.
C. Make specific commitments in the field of trade in goods, especially with regard to the issue of customs fixation. This is done through bilateral negotiations with Arab trading partners who demand the removal of restrictions on foreign trade exchanges and customs fixation.
D. In the field of services, Arab countries are also committed to the sectors in which foreign service entry into their markets is required.
Rights:
The right of the Arab good´-or-service to enter international markets with the best treatment in terms of applying the customs tariff for imports according to the low GATT tariff. The scope of joining the GATT agreements is to maintain a balance between the obligations and rights arising therefrom, by following the following:
1. Imposing a somewhat high customs tariff on goods that are required to be protected´-or-that constitute a resource for the state treasury.
2. Using the customs fixation method in the upper-limit-s of the current tariff.
3. Setting a timetable that gives Arab countries the possibility of arranging economic conditions and products with developments in light of the GATT agreements.
The final document of the GATT agreements recognized the right of developing countries to development, and urged all member states to consider the development conditions in these countries, and their financial and trade needs. However, this does not change the fact that all the privileges obtained by developing countries in the agreements as a whole, are aimed primarily at the first is to facilitate the commitment of developing countries to the provisions of the agreement within the framework of international trade liberalization, while ensuring that it does not violate the rights of other member countries.
Free international trade:
Talking about free international trade cannot be achieved without the participation of developing countries, which are the main market for the products of the advanced industrial countries in terms of goods and services and a major source of raw materials and energy sources. It was necessary to make this possible by granting developing countries some facilities that would enable them to participate. These facilities represented temporary incentives for developing countries to help them restructure their economies and amend their national trade legislation and policies to suit the new thought of liberalizing international trade in its comprehensive sense.
However, it is agreed that the implementation of the Uruguay Round agreements will entail gains and costs, and that the distribution of these gains and costs among the Arab countries will vary from one country to another based on the nature of their economies. In general, it is expected that the countries that will get the maximum possible economic gains will be those that are characterized by a liberal economic system with an external orientation, at the expense of the countries that follow a closed economic system and that depend on trade preferences for the access of their exports to the markets of developed countries, as well as those that depend import to provide for its food needs.
I - The impact of the GATT agreements on the agricultural sector in the Arab world:
When joining the GATT agreements, liberalizing international trade and engaging in globalization, the Arab economies and the agricultural sector in them will be faced with a new reality that raises many questions. What is the impact of the GATT agreements on what has been achieved? Then what is its impact on the agricultural sector in the Arab countries? What is its impact on the Arab economy? To answer these questions, we review the most important effects of accession to the World Trade Organization, and identify the expected changes, the most important of which are: changes in market access opportunities, reductions in support to agricultural producers, the transition to tariffs, and reductions in support for agricultural exports.
Market access opportunities:
For commodities of strategic importance such as grains and cotton, it is noted that the production of these commodities in the vast majority is in the hands of the private sector, but the state is the one that carries out planning, financing, pricing and marketing operations. That is, the market mechanisms are disrupted in the production and exchange of this type of crop in the country.
Reducing agricultural support: -dir-ect government support for agriculture in Arab countries is not large and is-limit-ed to specific aspects that do not contradict much with the GATT agreements. As for the currently used subsidy methods, they are not prohibited under the agricultural agreement, and the conditions for reducing agricultural subsidies will not have an impact on this sector.
Reducing subsidies on exported agricultural commodities: agricultural exports in Arab countries do not benefit from any -dir-ect support in the event of export, and some of them are still subject to tax upon export (such as the cotton export tax in Syria). Hence, the item related to reducing subsidies on exports will not have an impact on reducing their exports. As for in-dir-ect support, such as decisions and laws that encourage the export of these commodities, they are not included in the agricultural agreement and will not be held accountable for them upon accession.
The agreements are expected to lead to a change in the rules governing global trade in agricultural products, and this change will inevitably affect agricultural production, consumption, trade flows and prices in the world.
The impact of the agreements on agricultural products in Arab countries is related to changes in the structure of exports and imports for these products and relations trade with countries outside the Arab world and the components of its economic activities, especially when it imports more than half of its food needs with Arab countries.
The reduction of customs restrictions:
It is expected that the reduction of customs restrictions, the abolition of subsidies and the removal of non-tariff barriers will lead to changes and negative´-or-positive effects on agricultural products in Arab countries, the most important of which are:
1. The main beneficiary as a result of these measures is the consumer in developed countries, because he will benefit from the reduction in taxes allocated to agricultural subsidies.
2. The developing countries, including the Arab countries, will initially suffer from the new trade arrangements that will be imposed on this group of countries in order to raise the competitiveness of their exports.
3. It will also achieve clear benefits for all countries of the world in the long run, in terms of the effect this will have on reducing production costs, increasing competitive efficiency, and lowering prices.
4. The abolition´-or-reduction of agricultural subsidies will raise the prices of agricultural commodities imported by Arab countries, especially grains, dairy, sugar and meat. United Nations sources expect that the loss of Arab countries in the social welfare index due to the liberalization of international foreign trade in agricultural commodities will reach about -$-900 million annually.
5. It is unlikely that changes in high prices due to the agreement will change the general behavior of producers´-or-consumers of agricultural commodities in the Arab countries.
6. It is likely that there will be a significant change in the patterns of savings and investments.
Arab agricultural integration and the bloc between the Arab countries would mitigate the potential negative effects of the agricultural agreement on the Arab countries, as achieving this integration will inevitably lead to an increase in the ability of the agricultural sector in the Arab world to meet the food needs of the population as well as increase the competitiveness of Arab agricultural exports. The terms of the GATT agreements also provide an incentive for Arab countries to define the areas and priorities of joint Arab agricultural work from an economic standpoint that takes care of their interests.
The balance of benefits and losses:
After putting all the previous data in the balance of benefits and losses, it was found that the agricultural sector will not benefit´-or-lose in the event of joining the World Trade Organization and engaging in the process of economic globalization, because the Arab countries have already implemented the majority of their commitments resulting from the agricultural agreement as a result of the agricultural policies followed after 1987.
II- The impact of the GATT agreements on the industrial sector in the Arab world:
The industrial sector in the Arab world will be affected -dir-ectly´-or-in-dir-ectly by the results of the GATT agreements, and the -dir-ect effects will result from the application of the texts of the agreements related to trade in textiles, clothing and industrial products that include reducing tariffs (or customs duties), canceling non-customs restrictions,´-or-re-arranging trade conditions among Specifically related to industrial goods, to facilitate their entry into global markets.
(As for the Arab countries benefiting from the Uruguay Round Agreements, it is expected that this will come as a result of expanding opportunities to export semi-finished and finished products, which will increase employment creation opportunities, and allow for interaction with market developments and technical developments in the manufacture of products involved in international trade. The requirements of increasing the degree of industrialization in exported goods will encourage Arab countries to reduce their heavy dependence on the export of traditional primary products, which face a decline in international exchange rates and whose prices are characterized by instability. There is a more important advantage, which is the improvement in opportunities for Arab products to enter the markets, which It comes as a result of removing´-or-reducing non-tariff barriers, especially for textiles, clothing and petrochemical products. Finally, the Arab countries are expected to benefit from strengthening the interconnection between different sectors such as agriculture and services with industry at the level of the national economy as a result of freedom of interaction with scientific markets. Among these matters, Arab countries are linked to their ability to enhance their production capacities and the ability of their exports to competition with exports from other countries).
The Textiles and Clothing Agreement:
In the event that Arab countries join the organization, the industrial sector will be subject to a transitional phase regulated by the Textiles and Clothing Agreement, and at the end of it will be subject to the industrial agreement like other industrial goods. Accordingly, the Arab countries will be committed to canceling the quota systems on textiles and clothing to treat their imports like other industrial imports. This is according to the following:
• The first stage: On 1/1/1995, the quantitative restrictions are lifted from 16% of the total volume of imports of textiles and clothing.
• The second stage: On 1/1/1998, restrictions were lifted for another 17%.
• The third stage: On 1/1/2002, restrictions are lifted for another 18%.
• The fourth and final stage: On 1/1/2005, the quantitative restrictions are lifted from the rest of the percentage, which is 51%.
This process will take place considering the abolition of the quota system each time for at least one of the types of goods covered by the agreement: yarn, fabrics, clothing, and products made of textiles.
We note from the study of the reality of industry in the Arab world, that the trend towards liberalization of markets and foreign trade exchanges will make it imperative for Arab countries to -dir-ect their savings to develop the export industry sector in the Arab world. This requires the adoption of an economic policy that fosters individual initiative and provides it with means of stability and reassurance, especially since most Arab countries believe that the decline in the role of the private sector in industrial development in the sixties and seventies until the mid-eighties has-limit-ed the possibility of developing Arab industry.
Obstacles and difficulties in the manufacturing sector in the Arab countries:
The manufacturing sector in the Arab countries faces a number of obstacles and difficulties, the most important of which are:
1. Decreased value added in manufacturing industries.
2. The large deficit between exports and imports of manufacturing products.
3. The current economic challenges related to global changes and the global economy.
In order for the Arab countries to face the new conditions in light of the implementation of the GATT agreements, it is necessary to expand the Arab industrial goods markets beyond national and regional borders towards the expanded Arab market (national).
Arab countries can benefit from the issue of exemption from the obligations granted by the agreements to developing countries and least developed countries, which would revitalize the path of industrial development. It can also take advantage of preventive measures that allow import restrictions for any product in cases where imports increase unexpectedly, causing harm to domestic producers. Among these exceptions are:
With regard to securing minimum-limit-s for entering the markets of developing countries. Difficulties and serious imbalances in the balance of payments. Provisions for the protection of emerging industries in developing countries. The Arab countries can also benefit from the technical and financial aid provided by the advanced industrial countries to the developing countries,´-or-from the compensation provided by the rich countries to mitigate the damages and the interim repercussions of restructuring.
In the event that the Arab countries decide to join, and reduce their protection for this sector, it will be exposed to more sufficient industry competition, with better quality, at cheaper prices. It has no choice but to develop and rapidly enhance its competitiveness because it will face a double risk: the risk of external competition, difficulty in opening new markets that are not linked with their countries with preferential agreements that allow their goods to enter their markets on concessional terms, and the risk of competition within local markets when the door to import is opened and tariffs reduced. customs duty.
If development is the only option for industry in Arab countries, Arab industry will need huge funds to renew the means of production. And if most Arab industries will be exposed to competition in the event of joining in a way that some of them may threaten to close, there are productive companies and institutions that may not be losing, such as companies that produce highly efficiently, have contact with global markets and are able to export, and industries that use modern technology.
3 - The impact of GATT agreements on the services sector:
Arab countries in the services sector are considered among the countries whose imports exceed their exports, and therefore services are a source of the deficit in their balance of payments. Arab markets, especially oil-rich countries, are among the largest importing markets for services. In 1988, Saudi Arabia ranked thirteenth in the list of the world s most important importing countries for services.
Arab countries still suffer from the weakness of their institutions operating in the service sector due to their lack of technological advantages for foreign companies affiliated with developed countries. It also suffers from a weak ability to offer its services in foreign markets and in the world in general, except in the case of services related to the transfer of labor.
It is worth noting that oil did not receive enough attention in the successive negotiations within the framework of the GATT agreements in the Uruguay Round, due to the almost complete absence of the interests of the main oil importing countries in the negotiation rounds, in addition to the absence of large customs tariffs on it in many countries of the world. In the industrialized countries, the United States imposes specific duties on imported crude oil of 10.5 cents per barrel if its density is 25 API degrees and 5.25 cents per barrel if its density is less than that.
As for investment, the commitment of Arab countries to the provisions of the GATT agreements will have a positive impact on the rate of capital flows to Arab countries, as this includes amending the legislation regulating investment in Arab countries in a way that guarantees foreign, Arab´-or-national capital, freedom of flow and movement and ease of recycling Capital and its export, and the freedom to dispose of profits in accordance with economic and objective controls.
Maximizing benefits and minimizing damages and losses:
To mitigate the negative effects resulting from joining the World Trade Organization, Arab countries can follow procedures that were followed by developing countries before them, by presenting tariff ceilings in their schedules for industry that are higher than those currently applied, provided that they do not include all industrial goods. These percentages will depend on the following:
The extent of the demands of the Arab countries trading partners in terms of liberalization of the industrial sector.
The goods that the Arab countries consider to maintain protection as an economic necessity that is commensurate with the economic orientations of the state in a manner consistent with the principle of -convert-ing all quantitative restrictions into tariffs.
The negotiating power of the Arab delegation´-or-delegations for accession negotiations.
With the aim of maximizing the benefits that Arab countries obtain from their accession to the GATT agreements and minimizing the damages and losses resulting from that, the following proposals can be made:
- Studying the GATT agreements and the related rights and obligations, with the possibility of benefiting from the flexibility granted to developing countries in terms of obligations.
- Conducting a detailed study of the basic objectives of negotiation by the state wishing to join, based on a detailed analysis of its economic strategies and policies and their consistency with the organization s commitments. It should also include determining the role of foreign trade and its contribution to development now and in the future, identifying globally competitive sectors in the national economy that can increase export possibilities, and determining the extent of the need to protect socially important sectors and nascent industries. This readiness will be accompanied by a thorough knowledge of each of the Organization s agreements and an in-depth analysis of national laws and regulations and their compatibility with them. Many developing countries have found themselves completely unprepared to meet this challenge in terms of human and financial resources, especially after applying for accession.
- A political consensus must be built among all groups within the country wishing to join with regard to issues that will require significant amendment of decisions and laws in a manner that makes them consistent with their obligations towards the organization. And the necessity of the cooperation of governmental and non-governmental agencies in determining the obstacles to exporting to the international market so that it is appropriate with the new conditions, so that Arab production is within the framework of the new conditions.
- The importance of exchanging experiences with other Arab countries that are members of the World Trade Organization,´-or-countries that are on their way to join.
- The GATT secretariat can also provide technical assistance in this field to developing countries, including Arab countries, according to the requests it specifies.
Significant efforts should be devoted to developing a governmental mechanism to support accession negotiations, which would have sufficient authority to coordinate this process between different government agencies, and between them and legal and commercial institutions. This mechanism will result in the formation of a highly qualified negotiating team capable of dealing with related problems, including technical and “logistical” problems such as the need to process a large number of documents, translate them, and translate relevant local laws into the official languages of the Organization. It may be necessary to form a committee from the relevant government agencies (economy, finance, industry, tourism), chambers of industry and commerce, and private sector organizations to study the negatives and positives resulting from joining´-or-not joining the World Trade Organization and considering the following facts:
A- The Arab countries have the right to apply to join the GATT (as this does not constitute any obligation on the Arab countries) before accepting its membership, which is not expected to be two years´-or-more before, and this is the only way to know what the trading partners want from the Arab market.
B - The importance of the future outlook in this matter, given the expected toughness in the future in accepting new members and increasing the obligations imposed on them.
C - The link between the decision to join´-or-not with the economic policies in the Arab countries in terms of encouraging investment and whether the production will be for the local market only,´-or-is it production for export with the importance of the export sector in the field of development and employment.
It is very important to provide all the necessary documents detailed and correct from the start in the application note to avoid misunderstandings and additional unnecessary questions that may delay the joining process. He also spoke with some countries that wanted to join, and they were asked questions about: ambiguity of some answers, lack of clarity,´-or-the use of incorrect´-or-unfamiliar vocabulary...etc.
After all this, it must be remembered that the process of Arab countries accession to the World Trade Organization is not a one-sided process that is the country wishing to join. As for the first party: joining the organization is not as easy as we expect. Even if any Arab country took the decision to join today, it may need a period of no less than two years´-or-more to become a full member of the organization, due to sometimes complicated procedures, and the impact of the political role on progress being made at other times.
According to practical experience, the cost of non-joining can be calculated in advance in terms of the right of other countries to discriminate against the good´-or-service that Arab institutions can provide by taking-limit-less measures regarding customs tariffs´-or-non-tariff restrictions. As for the cost of accession, it depends on the requests that will be submitted to Arab countries from other parties (customs reduction... customs fixation - removal of non-tariff restrictions) and this can only be achieved after the start of accession negotiations in which it is possible to continue´-or-stop and postpone according to national interests.
The Arab countries do not have the option to join´-or-not to join the GATT agreements´-or-the World Trade Organization and its institutions, which now include more than 124 countries and control more than 95% of world trade. Also, the non-joining of the Arab countries to the agreement will not prevent them from being affected by its provisions, especially since the new international system that emerged at the beginning of 1995 will represent the commercial aspects related to intellectual property protection (especially technology) and trade in services (tourism, transport, banking, communications, consulting and others). As well as the commercial aspects related to investment and development.
The survival of Arab countries´-or-any other country outside the framework of the GATT and WTO agreements has become almost impossible. Because it will find itself unable to secure its commercial exchange and deal with other countries without facing many difficulties and obstacles, in addition to the fact that other member states will apply restrictions on them that they cannot confront in the field of commercial dealings in the international market, so the Arab countries should not remain outside agreements GATT and the World Trade Organization.
Assuming that the Arab countries that have not yet joined the World Trade Organization applied for accession today. It must determine in the first place what are the strategies of foreign trade and what are the development strategies, and the extent of their compatibility with the Marrakesh Agreements in order to know what it wants from the organization, and how it will benefit from it. And then what reforms are required in its economy to be in line with the organization.
In a situation like this, different ideas begin to appear, which is useful for reaching a correct and clear plan for economic development. This term has been regressed in order to achieve development in many economic literatures in the world, to be replaced by talk about globalization, privatization, liberalization of global trade and carrying out economic and administrative reforms. to enter the organization. The discussion in this context remains incomplete if it does not include the most important thing that the Arab countries need, which is economic development, which is implicitly imposed by the Marrakesh Accords so that the countries benefit from their membership.
There must be a clear and specific vision of the path that the Arab countries want to take, not to continue to take interim measures here and there on behalf of delving into the essence of their economic problems. The controversy over its accession to the World Trade Organization will not end until the controversy over its economic orientation and identity ends, and detailed studies are conducted that determine the correct way to achieve its desired economic goals and determine whether they are consistent with the goals of the organization, then answer the central question related to accession´-or-not, what is the benefit of that, and with what The conditions will be to join, what is the price, and what do you want the organization to be joining in the interest of its development strategy. It can be pointed out that the benefit of the entry of Arab countries into bilateral´-or-collective agreements within the framework of joint Arab economic action, the free trade zone, may seem more useful and closer to achieving than it is in light of the accession of each individual country to the World Trade Organization.
Prof. Dr. Mustafa El-Abdallah Al-Kafry

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