U.S.-Middle East Free Trade Agreements
Recent Events
U.S.-Egypt Relations
Egypt, a long-time ally with profound influence on U.S. security, is making a transition from authoritarianism to democracy and needs support from the United States. In a time of declining foreign assistance, Egypt's aspirations for job-creating economic growth could be furthered by pursuing a free trade agreement with the United States.
Likewise the Egyptian market, strategically located astride the Suez Canal, offers promising opportunities for United States exporters seeking a platform to serve the Middle East and North Africa region.
House Rules Committee Chairman David Dreier (R-CA) introduced
H. Res. 472 expressing the sense of the House of Representatives that the United States should initiate negotiations to enter into a free trade agreement with Egypt.
On December 14, 2011, the U.S. Chamber applauded the report prepared by the Center for Strategic and International Studies (CSIS) calling for U.S. policy makers to work toward the goal of launching free trade agreement (FTA) negotiations with Egypt. "As the United States continues to pursue its goal of doubling exports by 2014, it must look towards countries that will be integrating into the global economy," said Lionel Johnson, vice president of Middle East and North Africa Affairs. "This report is simple in its message: closer trade relations between the United States and Egypt can bring growth and jobs for both countries."
The report emphasized, per the US Chamber, how a potential FTA with Egypt could create jobs in the United States and Egypt. It noted that the United States has a history of providing economic aid to Egypt and has earmarked roughly $250 million each year since 1999 across a variety of trade, economic, health, and education activities. This total is among the largest of all U.S. assistance programs. As highlighted in the report, a FTA would be a budget neutral, economic approach to support a key strategic ally. According to the Office of the United States Trade Representative, Egypt was the 33rd largest market for U.S. goods exports in 2010, and the growth trend in the commercial relationship is continuing. U.S. goods exports to Egypt in 2010 were $6.8 billion, up 30.1% ($1.6 billion) from 2009, and up 140% from 1994.
In his annual speech
Next Steps for the American Trade Agenda on December 2, 2011, Tom Donohue, CEO of the U.S. Chamber of Commerce, called on the United States to pursue free trade negotiations with new partners including Egypt.
Supporting our Egyptian Partners Through Trade -
U.S. Chamber Post, December 2011
President Obama gave a major speech addressing a range of political and economic issues in the Middle East and North Africa.
U.S.-Israel Free Trade Agreement
In 1985, President Ronald Reagan signed the U.S.-Israel Free Trade Agreement. It was the first FTA the United States entered into, and has served as a model for many future trade agreements. The FTA eliminates all custom duties between the two countries, and has resulted in a huge increase in the overall volume of bi-national trade to total $32.2 billion in 2010. U.S. exports account for roughly one fourth of all Israeli imports, with a value of over $11.3 billion. Israeli exports to the United States have also increased since the FTA’s implementation. In 2010, Israeli imports to the United States were $21 billion, an increase of over 300 percent since 1985. Israel is the 23rd largest export market for U.S. goods and services.
California exports to Israel were up considerable from $1.2 billion in 2009 to $1.95 billion in 2010, with manufactured goods accounting for the majority of these exports.
USTR Announces Agreement between the U.S. and Israel to Reaffirm Commitment to Expand Bilateral Trade and Investment
Deputy United States Trade Representative Ambassador Miriam Sapiro and Israel’s Director General of the Ministry of Industry, Trade, and Labor, Sharon Kedmi, this week reached agreement on a process to further their shared commitment to expand trade and investment between the United States and Israel. They applauded progress on trade and investment issues since a meeting between Ambassador Kirk and Minister Ben Eliezer in Washington in October 2010, and agreed to a plan that will guide future discussions and develop further as those discussions evolve. They also agreed to redouble their efforts to make further progress ahead of the U.S.-Israel Free Trade Agreement (FTA) Joint Committee meeting, to be held later this fall.
“The Obama Administration places great importance on the relationship between our countries, and we will continue our collaborative efforts to expand trade and investment opportunities for American and Israeli exporters and investors,” said Ambassador Sapiro.
The two sides also agreed to explore ways to realize fully the potential benefits of the U.S.-Israel trade agreement, including through the further liberalization of trade in services and agriculture and the removal of trade-restrictive measures. Ambassador Sapiro and Director General Kedmi also committed to consider cooperation in other areas, including addressing regulatory issues which might be impeding the movement of goods, services and capital between the two countries, in consultation with relevant stakeholders.
U.S.-Jordan Free Trade Agreement
The U.S.-Jordan Free Trade Agreement has brought significant benefits to both nations since its implementation in 2002. Jordan's exports to the United States increased from $228 million in 2001 to $974 million in 2011. U.S. exports to Jordan grew from $343 million in 2001 to $1.2 billion in 2011. The positive impact on some of the United States major industries has been staggering. Exports of U.S. automobiles to Jordan have risen by 1500 percent. Corn exports have increased 2300 percent and exports of TV and radio transmitters have grown by 500 percent.
On September 28, 2001 President Bush signed into law the U.S.-Jordanian Free Trade Implementation Act. The Agreement went into effect on December 17, 2001.
The JFTA eliminates duties and commercial barriers to bilateral trade in goods and services originating in the United States and Jordan. It is America's third free trade agreement, following the U.S.-Israel FTA and the North America Free Trade Agreement (NAFTA) and the first with an Arab country. The JFTA will support Jordan's domestic economic reforms, encourage efforts by other Middle East countries to open their economies and enhance regional stability. The JFTA will play a major role in fostering closer bilateral business ties between American and Jordanian firms. It also will provide benefits to consumers and businesses in the United States and Jordan by increasing choices and lowering the prices of goods and services.
The JFTA also includes, for the first time ever in the text of a trade agreement, provisions addressing trade and environment, trade and labor, and electronic commerce. Other provisions address intellectual property rights protection, balance of payments, rules of origin, safeguards and procedural matters such as consultations and dispute settlement.
U.S.-Bahrain Free Trade Agreement
On August 1, 2006, President Bush issued a proclamation making official the U.S.-Bahrain Free Trade Agreement, opening the way for tariff-free bilateral trade in all industrial and consumer goods and creating new opportunities for trade in services and agricultural goods.
The agreement will eliminate duties on all consumer and industrial products and 81 percent of U.S. agricultural exports. This FTA will be particularly beneficial to U.S. exports of aircraft, machinery, pharmaceuticals, and agricultural products.
Two-way trade between the United States and Bahrain increased to over $1.7 billion in 2010. U.S. goods exports were $1.3 billion, including vehicles, machinery, aircraft, toys and other manufactured products.
In 2010, California exports to Bahrain were more than $63 million.
U.S.-Morocco Free Trade Agreement
Current:
October 28, 2010
Marrakesh, Morocco - Deputy United States Trade Representative Miriam Sapiro and Moroccan Minister of Foreign Trade Abdellatif Maazouz met in Marrakesh on Tuesday, October 26, 2010, during the World Economic Forum on the Middle East and North Africa. The meeting focused on how the United States and the Kingdom of Morocco can energize the U.S.-Morocco Free Trade Agreement (FTA) in a way that is mutually advantageous for both countries.
During the meeting, the two parties agreed to adopt a work plan focused on resolving questions related to the U.S.-Morocco FTA on agriculture, textiles and customs issues. The work plan also addresses other issues, such as labor, the environment, and bilateral cooperation, including technical assistance to improve the way the U.S.-Morocco FTA benefits exporters in the two countries. Minister Maazouz and Ambassador Sapiro expressed a firm commitment to timely implementation of the work plan. The goal for both countries is to move forward to a stage of strategic planning in trade and investment and in order to derive the greatest benefit from the FTA.
Background:
The U.S. Morocco Free Trade Agreement was implemented on January 1, 2006. The Agreement eliminates tariffs on over 95 percent of bilateral trade in consumer and industrial products, with all tariffs being phased out within 9 years. This reduction in duties will create a huge opening in Morocco's market for U.S. exports such as information technology, machinery, and agriculture.
In January 2005 the Moroccan Upper House of Parliament passed the U.S. Morocco FTA following the earlier passage by the Moroccan Lower House. The United States and Morocco will work to ensure that domestic laws comply with the terms of the agreement in order to bring the FTA into effect.
On August 17, 2004, President Bush signed the U.S.-Morocco Free Trade Agreement Implementation Act. Commenting on the legislation, the White House said, "This agreement will help create jobs and new opportunities for Americans by deepening our trade ties with an important friend in the Arab world."
The U.S. House of Representatives passed the U.S.-Morocco Free Trade Agreement by a vote of 345-76 on July 22, 2004. This came just a day after the Senate passed the Agreement, 85-13. Both California Senators, Barbara Boxer and Dianne Feinstein voted for the bill. In a statement released after the vote, U.S. Trade Representative Robert Zoellick commented that the agreement, "signals our commitment to deepening America's relationship with the Middle East and North Africa."
On April 23, 2002 President Bush announced that the United States would work to enact an FTA with Morocco. This was announced at the White House following a meeting with His Majesty King Mohammed VI of Morocco. The King had already met with U.S. Trade Representative Ambassador Robert Zoellick twice. On October 1, 2002, the USTR notified the Congress of the President’s intent to enter into trade negotiations.
The U.S.-Morocco FTA will build on the bilateral work that began in 1995 under the U.S.-Morocco Trade and Investment Framework Agreement. The U.S.- Morocco FTA eliminates duties and barriers to trade for both U.S. and Moroccan-origin goods and also address trade in services, agricultural products, trade-related aspects of intellectual property rights, government procurement, trade-related environmental and labor matters, and other issues. The FTA is expected to contribute to stronger economies, the rule of law, sustainable development, and more accountable institutions of governance. The FTA will also help to support and accelerate economic and political reforms already underway in Morocco.
The United States currently has a trade surplus with Morocco. In 2010, U.S. annual imports from Morocco totaled $685 million, with U.S. exports reaching $1.9 billion. Some of the major products the United States exports to Morocco are aircraft, corn and machinery. There are significant growth prospects for U.S. products under the Agreement in areas such as oilseeds, feed grains, and products in the energy, tourism, and environmental sectors.
In 2010, California exported more than $89 million to Morocco, up considerably from the amount exported in 2009. California's main exports to Morocco are computers and electronic products.
The U.S.- Morocco Free Trade Agreement will send a strong signal that the United States intends to remain heavily engaged in the Middle East for a long time to come in business, economics, security and international politics. The FTA will stand as a model for other bilateral trade agreements in the region and in multilateral forums. The FTA will contribute to regional and global trade liberalization and strengthen the multilateral trading system.
Per June 2009 - WTO has released its first Trade Policy Review (TPR) of Morocco since the US-Morocco FTA entered into force and notes that "economic and trade reforms pursued by Morocco...have contributed to the positive overall performance of its economy, including its growing diversification..." The report and additional background may be found at Morocco: Trade Policy Review
U.S.-Oman Free Trade Agreement
On September 26, 2006, President Bush signed legislation to implement the U.S.-Oman Free Trade Agreement, making it the fifth Middle Eastern country to have a free trade deal with the United States. Under this agreement, all bilateral trade in consumer goods and industrial products will become duty-free.
The U.S. Senate passed the agreement first in June 2006 by a vote of 60-34, then again in September 2006 by a vote of 63-31. The measure passed through the House of Representatives by a vote of 221-205 on July 20, 2006.
The U.S.-Oman FTA will benefit both the California and the United States. In 2010, California exports to Oman were more than $61 million, double the amount of exports in 2005. The U.S.-Oman Free Trade Agreement will continue to increase the state’s exports in computers, electronics, agricultural products and manufactured goods.
Oman is a potential market for U.S. oil equipment and services, transportation equipment, water and environmental technology, medical equipment, electrical and mechanical equipment, and many other competitive U.S. products and services. Bilateral trade between the United States and Oman totaled over $1.8 billion in 2010. U.S. goods exports to Oman were $1.1 billion last year, with significant growth in sales of aircraft and machinery.
USTR: U.S.-Omani Trade Relations Spotlight
CalChamber Position
The CalChamber, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business. New multilateral, sectoral and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.