Bush wants MidEast Free Trade Zone

[MichaeltheGreat]

Originally posted by The diplomat
What about the fact that a Free Trade Zone in the ME will improve the standard of living in the ME, which will reduce poverty and despair, which will make terrorism less popular.

If they have nothing substantially to trade except oil, which is already on a global free market (let's face it, the ME isn't known for being agricultural paradises or for their industrial productivity), then how will they be helped?

The economic problems with the ME aren't lack of wealth, it's the obscene concentration of that wealth in the hands of decadent oligopolies or autocracies.

The social problems aren't lack of access to Coca-Cola and Nike shoes, but deep-seated cultural collision between religious conservatives and traditionalists, who are appalled by the behavior of the western-enriched ruling elite.
[/quote]

If you want a peaceful ME, democracy and capitalism are the best ways of doing it.

Democracy, maybe. We really don't want democratic fundamentalist governments, though. So democracy has to wait until there are fundamantel social changes.

Capitalism? Not in the current socio-economic structure. For capitalism to have any sort of popular benefit, all of a society has to have access to the benefits of a capitalist system. If you start out with a skewed system where most of the wealth, education, and privileges are already concentrated in the hands of a few, then capitalism is merely going to reinforce their advantage. The failure of socialism is that it pulls anyone successful down to the base level, the failure of capitalism is that once some people fall behind, the efficiencies of the capitalist system tend to accelerate the differences between winners and losers.

What is needed is substantial reinvestment of oil revenues into education, infrastructure, standard of living benefits, economic diversification, and meaningful employment opportunity. THEN, a transition to democratic and capitalist systems.

[Sava]

Free-trade in ME = more money for MNC's

UR is right: This will prevent domestic ME industries from growing.

[Imran Siddiqui]

What do the ME countries have to export besides oil now? In the eventuality that they might start some sort of industries, free trade ensures that these industries get crushed by transnational corporations.

Which transnational corporations are going to be making tons by this? These people aren't going to be making any less than people in other free trade agreements that the US has set up. MNCs can easily go to Mexico or Jordan if they want to go somewhere to pay people less.

I think this can help the countries of the ME. It can get them more jobs and economic progress.

[Dinner]

MTG: I agree currently the ME produces and trades nothing but oil, but, this has mostly to do with the statist policies which EVERY SINGLE ONE of these countries has prosued since independence. There was such market fragmintation and over regulation combined with crushing taxes that business just couldn't get off the ground nor did they have a market if they did.

This would solve the biggest part of the problem. It will force the ME to inact pro-growth policies which will improve the lives (and incomes) of the people. Of course these people may continue giving money to terrorists but at least there'd be fewer terrorists who have nothing to live for.

[Sirotnikov]

This is nice, though i think it may threaten the Israeli economy.


Already during the mid to late 90s Israeli firms, including high-tech were setting up shop in Egypt and Jordan. The Intifada put a stop to that.

When the middle easterns aren't busy exploding or blowing up each other, we are quite smart people.

[GePap]

Tariff free tradebetween these states and the US wpould not be too bad, but it would not be a huge aide either, specially for the states mentioned. Only Iraq has the basics of a more diversified economy, and even that is not that strong. It would make more sense to try to promote free trade among ME states, but that won;t happen anytime soon.

Egypt really would benefit more form this, but I fail to see it included.

[DanS]

If they have nothing substantially to trade except oil, which is already on a global free market (let's face it, the ME isn't known for being agricultural paradises or for their industrial productivity), then how will they be helped?

The Jordan free trade deal has been very successful in the short time that it has been in effect, even though as you point out Jordan offers approximately nothing of value.

In 1998, Jordan's exports to the US were $16 million. In 2002, $412 million, the vast majority of which is clothing products. This represents about 20% of all of Jordan's exports and is a 90% or so increase from 2001. IOW, at least one ME country is reaping immediate and large benefits from free trade with the United States.

Furthermore, they buy almost as much from us as we do from them. So both sides are winning in this arrangement.

[Dinner]

the biggest road block I see is the US will want Israel in on it and the fundies in all the Arab countries will go crazy. Remember to this day nearly all of the official state owned news agencies and school text books in the Arab world continue to poison children with facist filth and hate.

[MichaeltheGreat]

Originally posted by DanS
If they have nothing substantially to trade except oil, which is already on a global free market (let's face it, the ME isn't known for being agricultural paradises or for their industrial productivity), then how will they be helped?

The Jordan free trade deal has been very successful in the short time that it has been in effect, even though as you point out Jordan offers approximately nothing of value.

In 1998, Jordan's exports to the US were $16 million. In 2002, $412 million, the vast majority of which is clothing products. This represents about 20% of all of Jordan's exports and is a 90% or so increase from 2001. IOW, at least one ME country is reaping immediate and large benefits from free trade with the United States.

Furthermore, they buy almost as much from us as we do from them. So both sides are winning in this arrangement.

Jordan is small and doesn't have oil. Clothing sweatshops aren't such an attractive option when you see your dictator/royal family hogging the lion's share of the 2 MM barrel a day oil trade.

[Urban Ranger]

Originally posted by Imran Siddiqui

What do the ME countries have to export besides oil now? In the eventuality that they might start some sort of industries, free trade ensures that these industries get crushed by transnational corporations.

Which transnational corporations are going to be making tons by this? These people aren't going to be making any less than people in other free trade agreements that the US has set up. MNCs can easily go to Mexico or Jordan if they want to go somewhere to pay people less.

TNC's make money by making goods in countries where costs are dirt cheap and sell in countries where living standards are high. So I don't see TNC's will be setting up shops in Middle East, or at least not in countries that have oil. They'd just dump the goods there, ensuring any competing local industries don't stand a chance at all.

Originally posted by Imran Siddiqui
I think this can help the countries of the ME. It can get them more jobs and economic progress.

The majority of countries "persuaded" by the World Bank and/or IMF to open up ended up with the short end of the shaft.

[Vesayen]

Re: Bush wants MidEast Free Trade Zone

Originally posted by The diplomat
Bush wants MidEast Free Trade Zone

And I want a playboy bunny to give me a check for 1,000,000,000 then tell me im immortal.........they are both equally likley to occure.

[Kidlicious]

Originally posted by MichaeltheGreat
What is needed is substantial reinvestment of oil revenues into education, infrastructure, standard of living benefits, economic diversification, and meaningful employment opportunity. THEN, a transition to democratic and capitalist systems.

We should invest in those things here in the US.

[Imran Siddiqui]

TNC's make money by making goods in countries where costs are dirt cheap and sell in countries where living standards are high. So I don't see TNC's will be setting up shops in Middle East, or at least not in countries that have oil. They'd just dump the goods there, ensuring any competing local industries don't stand a chance at all.

There is one difference. Cost in the ME aren't dirt cheap and living standards aren't ridiculously high for most people. The absolute rich will be able to buy MNC products more cheaply, but how much will it be worth it for MNCs to ship products to areas where they won't make much at all?

After all, even the worst companies know you have to have people that can afford the goods they send into the market, and there is only so much the super-rich can buy.