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Wednesday, May 22, 2024

Why We Need an Arab Common Market

by Khalaf Ahmad Al Habtoor

© Al Habtoor Group
© Al Habtoor Group

Changes in world trade are strengthening the realistation that the next century will be an age of economic trade blocs, and Arab countries must create their own trade bloc to defend their interests in the globalised economy of the future

The creation of a workable powerful, Arab Common Market has been the ambition of many perceptive people throughout the Arab world for many years.

The Arab community cannot itself be cut off from what is happening in the world around it. The region is part of a global economy that is in a quickening state of evolution, producing new structures in regional groupings, new technologies, and new patterns of world trade; shifts in global economic power makes states now more and more accountable to the World Trade Organization (WTO). This quickening evolution makes it all the more urgent that the Arab world faces these challenges united, as there is a need for common Arab economic responses to ensure we have a say in the shape of our economic future.

In the global economy, the European Community now has fifteen member states and a total population of 376 million, stretching from Finland in the North, to Greece in the South. As a union it speaks with one voice and in most instances acts as one unified unit in international trade.

The EU along with the United States, are the two most powerful economic powers in the world, drawing their strength and influence from the fact that they have a single market, a common market where goods flow freely, inside enormous domestic markets, It is these strengths that drive the engines of industry and commerce which affect the direction of the world economy so profoundly.

There will eventually be a shift of power as countries around the Pacific Rim and South East Asia successfully challenge the leading role of North America and Europe. But even here, the Asian and Pacific countries are trying to emulate the united economic structures that have made America and Europe so economically powerful. In the future, expect to see the creation of free trade blocs in the region.

 This seems to be an apparent paradox. While the global economy is merging and internationalizing, regional groupings are forming to give their individual members, through combination, greater weight and influence when trading in the global market place. In effect, what is happening is, the future economic world order is going to be negotiated by several blocs of broadly equal size and economic game is played.

So where do the Arab countries stand in the global economic interplay? Surely 250 million people, with a shared language and religion cannot remain fractured economically, while the rest of the world deploys its strength in regional groups. It is easy to say we need an Arab style Common Market to give the Arab speaking nations a voice in the new world order, but it is much more difficult to achieve, because of geographical distance and disparities in development, even among neighbors in the Arab World. Nonetheless the Arab community of nations cannot afford to ignore the lesson now being learned by the rest of the world, from the US and EU example, that combing interests in a single economic entity is the best safeguard for all countries in the new competitive global economy.

Everywhere you look in the world, including the small Caribbean states, there is a gathering together of people with common regional outlooks and interests. And while they may have differing economic models and trade arrangements, they are banding together to strengthen their negotiating powers though combining with others.

By comparison with this global tendency to combine, the Arab world does not present a picture of dynamic response to the changing economic world order. We are rich in energy and in agriculture. We are experienced in finance and in international energy.

We are not lacking in human energy or the intelligence required to create and important place for ourselves at the world’s top trade tables. But we have not done it. We have no common market for the common good, we do not even have a broad pan-Arab economic association with agreed trade guidelines. We lack a single voice, and we have no great trading muscle.

While others have acted, Arab nations have not. They have stood still. The WTO agenda is being shaped by powerful, well-organized and coherent multi-country organisations that speak with one voice. The poorly organized will have to follow their lead and comply with their rules. The Arab world; having no coherent voice, will fall into this latter category and will find itself moving down the table of economic advantage because of it.

Time is no longer on the Arab side. We need action if the Arab nation is not to be sidelined and marginalized. It cannot afford to be ignored in world trade policies, which shape individual state economies, because with rising young populations in all Arab states, there is a compelling demand for jobs and stability. The Arab world must utilize its common interests and act together, in order to have a decisive influence on the trade policies that will reach into the heart of our individual economies.

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