WASHINGTON, DC – U.S. Trade Representative Robert B. Zoellick today announced
the Administration’s intent to negotiate Free Trade Agreements with the United
Arab Emirates (UAE) and Oman, important steps on the path to fulfilling the
President’s vision of developing economic growth and democracy in the Middle
Zoellick sent a letter today to Congressional leaders to notify of this
intent to negotiate, in accordance with the procedures Congress established
under the bipartisan Trade Act of 2002.
Transmittal of the letter to the Hill followed shortly after Ambassador
Zoellick’s visit to the UAE and Oman and after House Ways and Means Committee
Chairman Bill Thomas led a Congressional delegation to Oman and other countries
in the Middle East.
"A free trade agreement with the UAE and Oman will promote the President’s
initiative to advance economic reforms and openness in the Middle East and the
Persian Gulf, moving us closer to the creation of a Middle East Free Trade
Area," wrote Zoellick. "An FTA with the UAE and Oman will build on the FTAs that
we already have with Israel, Jordan, and Morocco, as well as the FTA that we
recently have signed with Bahrain. It will also encourage the six members of the
Gulf Cooperation Council to adopt standards that promote trade and investment.
Furthermore, our free trade agreements in the Middle East complement The 9/11
Commission Report recommendation urging the United States to expand trade with
the Middle East as a way to ‘encourage development, more open societies and
opportunities for people to improve the lives of their families.’"
"These FTAs will directly benefit the United States," continued Zoellick. "By
reducing and eliminating barriers to trade, a comprehensive FTA with the UAE and
Oman will generate export opportunities for U.S. companies, farmers, and
ranchers, help create jobs in the United States, and help American consumers
save money while offering them more choices."
The United States trade relationship with the UAE is the third largest in the
Middle East, behind only Israel and Saudi Arabia. The U.S. has a combined
trading relationship of $5.6 billion and a trade surplus of over $2 billion with
these two countries. Major exports to these two countries include machinery,
aircraft, vehicles and electrical machinery. Major imports include mineral fuel
and woven apparel.
In initial consultations with the Congress, including a meeting with the
Congressional Oversight Group on September 8, 2004, broad bipartisan interest
was expressed for an FTA with the UAE and Oman. Following these consultations,
Zoellick visited the UAE and Oman in October to discuss with top officials the
topics covered in the United States’ comprehensive FTAs, to identify particular
areas for work, and to assess the UAE’s and Oman’s commitment to moving forward
with an FTA.
The Office of the U.S. Trade Representative will work closely with the
Congress over the next 90 days, as required by the Trade Act, and expects
negotiations to commence in the beginning of 2005.
Middle East Free Trade Initiative (MEFTA)
In May 2003, the President proposed a plan of graduated steps for Middle
Eastern nations to increase trade and investment with the United States and
others in the world economy. The first step is to work closely with peaceful
nations that want to become members of the World Trade Organization (WTO) in
order to expedite their accession. As these countries implement domestic reform
agendas, institute the rule of law, protect property rights (including
intellectual property), and create a foundation for openness and economic
growth, the United States will take a series of graduated steps with countries
in the region tailored to their level of development.
The U.S. will expand and deepen economic ties through comprehensive FTAs,
Trade and Investment Framework Agreements (TIFAs), and Bilateral Investment
Treaties (BITs), and will also enhance the Generalized System of Preferences
(GSP) program for eligible countries. This Administration has concluded two
FTAs, Morocco and Bahrain; ratified a third, with Jordan; and signed eight TIFAs
with Middle East nations.
United States Trade Agreements
U.S. FTAs: These are reciprocal and ambitious agreements that open markets
and strip away barriers across a broad array of goods, services, and
TIFAs: The United States has TIFAs with a number of countries to enhance
bilateral trade and coordinate regionally and multilaterally through regular
senior-level discussions on trade and economic issues. The TIFAs create Joint
Councils that consider a wide range of commercial issues and sets out basic
principles underlying the nations' trade and investment relationship.
BITs: These agreements level the playing field and ensure that U.S. investors
are protected when they establish businesses in other countries. By safeguarding
foreign subsidiaries of U.S. firms, BITs help promote new U.S. exports to the
markets of BIT partners. BITs also protect the interests of average American
investors, whose stock and bond portfolios often include stakes in
U.S. Trade Agenda
The United States is working to open markets globally in the Doha WTO
negotiations; regionally through the Asia Pacific Economic Cooperation (APEC)
and the Free Trade Area (FTAA) of the Americas negotiations; and bilaterally,
with FTAs. The Bush Administration has completed FTAs with 12 countries --
Jordan, Chile, Singapore, Costa Rica, the Dominican Republic, El Salvador,
Guatemala, Honduras, Nicaragua, Australia, Morocco, and Bahrain. With this
announcement, negotiations are under way or about to begin with 12 more
countries: Panama, Colombia, Peru, Ecuador, Thailand, the five nations of the
Southern African Customs Union (SACU), and now the UAE and Oman. New and pending
FTA partners, taken together, would constitute America’s third largest export
market and the sixth largest economy in the world.
U.S. – Middle East Free Trade Efforts (see chart)
The 9/11 Commission Report
The U.S. government has announced the goal of working toward a Middle East
Free Trade Area, or MEFTA, by 2013. The United States has been seeking
comprehensive free trade agreements (FTAs) with the Middle Eastern nations most
firmly on the path to reform. The U.S.-Israeli FTA was enacted in 1985, and
Congress implemented an FTA with Jordan in 2001. Both agreements have expanded
trade and investment, thereby supporting domestic economic reform. In 2004, new
FTAs were signed with Morocco and Bahrain, and are awaiting congressional
approval. These models are drawing the interest of their neighbors. Muslim
countries can become full participants in the rules-based global trading system,
as the United States considers lowering the trade barriers with the poorest Arab
Recommendation: A comprehensive U.S. strategy to counter terrorism should
include economic policies that encourage development, more open societies, and
opportunities for people to improve the lives of their families and to enhance
prospects for their children’s future.
The 9/11 Commission Report