During the last League of Arab States (LAS) summit in Amman in 2017, Arab leaders agreed on the fact that they will mandate the Economic and Social Council to prepare an action plan to boost intra-Arab trade, implement a customs union and promote a dynamic private sector in order to create more job opportunities. This statement is relatively similar to the announcement in 1945 when the Arab League was founded to improve coordination among its member states at the political, economic and social levels. Yet, until now, it has received criticism for failing to promote Arab-Arab cooperation in a context of disunity and poor governance. While this was partially the case at the political level, it was more obvious at the economic level. Indeed, the Greater Arab Free Trade Agreement (GAFTA) was declared within the Social and Economic Council of the Arab League as an executive program to promote trade and development in 1998. Yet, intra-Arab trade, investment and persons’ mobility remain significantly low when compared to other regions as a result of shallow integration. The latter implies tariff reductions at the border, but not ‘deep’ integration with changes behind the border, such as common competition rules or common products standards. Hence, the Arab League led to a shallow integration characterized by the following: stunted intra-trade in goods and services, low levels of investments in high added-value sectors and weak mobility of labor.
Author: Chahir Zaki
Publication Date: 2019