Middle East Free Trade Initiative

President Bush has proposed a free trade initiative that offers a vision of openness, trade integration, and economic development for the Middle East. America is committed to a step-by-step strategy for progress that will help nations
build free, dynamic economies and will raise standards of

· First, the United States will
actively support World Trade Organization (WTO) membership for those peaceful countries in the region that seek it. The U.S. wants to assist the full integration of the nations of the Middle East within the global trading system.

· Second, the United States will
expand the Generalized System of Preferences (GSP) program to increase U.S. trade
linkages with the Middle East. GSP provides duty-free entry to the U.S. market for some 3,500
products from 140 developing economies, including six countries and the West Bank in the Middle East. Last
year, Americans purchased nearly $300 million worth of products from the region under this
program—including Egyptian furniture, Omani jewelry, and Lebanese olive oil.

· Third, the United States will
offer to negotiate Trade and Investment Framework Agreements (TIFAs) that establish a framework for expanding trade and resolving
outstanding disputes. In addition to negotiating new agreements, the U.S. will offer to deepen those
TIFAs already in place with Bahrain, Morocco, Egypt, Tunisia, and Algeria. TIFAs are an important rung
on the ladder to a free trade agreement. They help nations develop the institutions and rules to
integrate more fully into the global economy.

· Fourth, the United States will offer to negotiate Bilateral
Investment Treaties (BITs) with interested countries. By obligating governments to treat foreign investors
fairly and offering legal protection equal to domestic investors, a BIT signals that a country is a safe
place to do business.

· Fifth, the United States will
negotiate comprehensive free trade agreements (FTAs). The U.S. has an existing FTA with Jordan, is negotiating an FTA with Morocco, and
is consulting with Congress about launching negotiations with Bahrain. Then, the U.S. will seek to
negotiate agreements with other countries. Eventually, these bilateral FTAs will be expanded into
sub-regional FTAs by bringing in willing countries that demonstrate a commitment to economic openness and
reform. Within a decade, the U.S. hopes to meld these sub-regional FTAs into an historic regional
Middle East Free Trade Area: a mutual commitment for openness among the United States and the nations of
the Middle East and Mahgreb.

· Finally, the U.S. trade strategy
includes the provision of trade capacity building aid to help countries realize fully the benefits of open markets. The Middle East
Partnership Initiative will help target more than $1 billion of annual funding from various U.S. Government
agencies and spur partnerships with private organizations and businesses that support trade and

"Leaders in the region speak of a new Arab charter that champions internal reform, greater political participation, economic openness, and free trade." President George W. Bush, American Enterprise Institute, February 27, 2003