ARAB COMMON MARKET



The Arab Common Market (ACM) was founded in August 1964 on the basis of a resolution passed by the Council of Arab Economic Unity (CAEU), an organization that the Economic Council of the Arab League had established in 1957. The ACM is not an independent organization and its implementation was overseen by the CAEU. In 1999 Egypt, Iraq, Jordan, Libya, Mauritania, Syria, and Yemen belonged to the ACM.

The long-term goal of the ACM was to establish a full customs union that would abolish—amongst its members—trade restrictions, trade quotas, and restrictions on residence, employment, labor, and transportation. Since its founding the ACM has fallen short of this goal. The ACM was successful, however, in eliminating some customs duties and taxes in gradual stages between 1965 and 1971. Between 1978 and 1989 the CAEU, in support of the ACM, adopted measures to relax membership requirements for the least-developed Arab states; approved, in principle, funding to compensate the least-developed states for any losses incurred by joining the ACM; prepared for a unified tariff on imports from non-ACM countries; formed a committee to promote ACM activities and deal with intra-ACM problems; and approved unified customs legislation.

The idea of a unified intra-Arab trading bloc goes back to 1953 when such an attempt was proposed by the Arab League in conjunction with the establishment of an Economic and Social Council. In 1957 the council adopted an Agreement of Economic Unity and in 1958 established the Council of Arab Economic Unity, both of which led to the formation of the ACM in 1964.

For numerous social, political, and economic reasons, however, the ACM never came close to reaching its ultimate goal of a full customs union. The Arab world has always been divided between the wealthy oil states and the least-developed marginal states such as Mauritania, Somalia, Sudan, and Yemen. Major political events such as the Cold War and the Gulf War, as well as differing internal institutions and external relations and policies, continue to hamper Arab economic integration.

Prodded by the realization that the global economy is moving towards numerous trading blocs (e.g., European Union, North American Free Trade Agreement, Association of South East Asian Nations), and the subsequent fear of being marginalized in the 21st century, there have been efforts to breathe new life into the ACM. In 1995 the CAEU reconfirmed an annual 10 percent tariff reduction on Arab manufactured products in any Arab market, while various seminars and conferences have dealt with implementation problems.

SEE ALSO : Arab Maghreb Union ; Arab Monetary Fund (AMF) ; Arab World, Doing Business in the

[ Michael Knes ]

FURTHER READING:

Abdel Hamid, Abdel El Motaleb. "Reformation of an Arab Common Market." Research and Arab Studies Magazine, July 1996.

El-Agraa, Ali M. Economic Integration Worldwide. New York: St. Martin's Press, 1997.



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