Initial Conditions and Incentives for Arab Economic Integration : Can the European Community's Success be Emulated?

The authors compare the European Community's "trade fundamentals" prevailing in the 1960s with those applying in Arab countries today. The fundamentals differ significantly-Arab countries trade much less with each other than EC members did, and the importance of such trade in GDP varies greatly. This suggests that a viable Arab integration strategy must follow a path that differs from the preferential trade liberalization-led approach implemented by the European Community. An alternative is to complement long-standing attempts to liberalize merchandise trade with an effort that revolves around service sector reforms and liberalization. This may prove to be an effective mechanism to support reforms as, in principle, there is a major constituency in each Arab country that has an interest in improving the performance of services-the natural resource-based and manufacturing sectors. A key condition for such an approach to be feasible is that Arab cooperation helps overcome political economy resistance to national, unilateral action, or, generates direct gains from cooperation in specific policy areas. The EC experience suggests that a services-based integration strategy will be complex and must be carefully designed and sequenced. Given the importance of services-related trade and logistics transactions costs, a first step might focus on bringing such costs down through a concerted joint effort.

Bibliographic Details

Main Authors:	Messerlin, Patrick, Hoekman, Bernard
Language:	English en_US
Published:	World Bank, Washington, DC 2002-10
Subjects:	AGRICULTURAL PRODUCE, AGRICULTURE, BENCHMARKS, BILATERAL AGREEMENTS, BILATERAL TRADE, BORDER MERGERS, CAPITAL MARKET, CARTEL, CARTELS, COAL, COLLUSION, COMMERCIAL POLICY, COMMON MARKET, COMMON TARIFF, COMPARATIVE ADVANTAGE, COMPARATIVE ADVANTAGES, CONSUMERS, CONVERGENCE, CREDIBLE TARIFF REMOVAL, CURRENCY, CUSTOMS, CUSTOMS UNION, CUSTOMS UNIONS, DEVELOPMENT, DIMINISHING RETURNS, DISCRIMINATORY TRADE AGREEMENTS, DOMESTIC INTERESTS, DOMESTIC MARKETS, DOMESTIC REFORMS, DOMESTIC REGULATION, ECONOMIC COMMUNITY, ECONOMIC COOPERATION, ECONOMIC EFFICIENCY, ECONOMIC FACTORS, ECONOMIC IMPACT, ECONOMIC INTEGRATION, ECONOMIC POLICIES, ECONOMIC POWER, ECONOMIC PROCESS, ECONOMIC SIZE, ECONOMIES OF SCALE, ELIMINATION OF TARIFFS, EMPLOYMENT, EMPLOYMENT POLICY, EXCESS SUPPLY, EXPORT MARKETS, EXPORT SHARES, EXPORT STRUCTURE, EXPORT SUBSIDIES, EXPORTS, EXTERNAL PROTECTION, EXTERNAL TARIFF, EXTERNAL TRADE, EXTERNAL TRADE POLICY, FACTORS OF PRODUCTION, FINANCIAL SUPPORT, FOREIGN POLICY, FREE TRADE, FREE TRADE AGREEMENTS, FREE TRADE AREA, FUELS, GDP, GDP PER CAPITA, GOVERNMENTAL COOPERATION, GRAVITY MODEL, HARMONIZATION, HIGH TARIFFS, IMPORT BARRIERS, IMPORT PRICES, IMPORTS, INCOME, INCOME DIFFERENCES, INDUSTRIAL POLICIES, INDUSTRIAL PRODUCTS, INDUSTRY TRADE, INTEREST GROUPS, INTERNAL MARKET, INTERNAL TRADE, INTERNAL TRADE LIBERALIZATION, INTERNATIONAL TRADE, INTRA-REGIONAL TRADE, LABOR FORCE, LABOR MARKETS, LEGISLATION, LIBERALIZATION OF TRADE, LOW TARIFFS, MARKET SEGMENTATION, MARKET SEGMENTING, MARKET SHARE, MARKET SIZE, MEMBER COUNTRY, MEMBER STATE, MEMBER STATES, MERCHANDISE TRADE, MONETARY POLICY, MULTILATERAL NEGOTIATING, MUTUAL RECOGNITION, MUTUAL TRADE, NATIONAL LAWS, NATIONAL LEGISLATION, NATIONAL POLICIES, NATIONAL REGULATIONS, NATURAL RESOURCES, OIL, OIL EXPORTERS, OIL PRICE, OIL SECTOR, PARTNER COUNTRY, POLICY HARMONIZATION, POLICY INTEGRATION, POLICY MAKERS, POLITICAL ECONOMY, PREFERENTIAL BASIS, PREFERENTIAL TRADE, PREFERENTIAL TRADE LIBERALIZATION, PRICE SUPPORTS, PRIVATE SECTOR, PROCESS OF INTEGRATION, PRODUCERS, PRODUCT CATEGORIES, PRODUCT DIFFERENTIATION, PRODUCT MARKETS, PRODUCTION COSTS, PRODUCTION PROCESS, PRODUCTIVITY, PROFESSIONAL QUALIFICATIONS, PROFIT MAXIMIZATION, PROTECTIONIST POLICIES, PROTECTIVE TARIFFS, PUBLIC HEALTH, PUBLIC INTEREST, PUBLIC SAFETY, RATES OF PROTECTION, REGIONAL COOPERATION, REGIONAL INTEGRATION, REGIONAL TRADE, REGULATORY AREAS, REGULATORY ISSUES, REGULATORY OBJECTIVES, REGULATORY REGIMES, RESTRICTIVE BUSINESS PRACTICES, SAFETY STANDARDS, SHARE OF WORLD EXPORTS, SOCIAL SECURITY, SOCIAL SECURITY COSTS, SPECIALIZATION, TARIFF LINES, TARIFF SCHEDULE, TARIFF SCHEDULES, TRADE, TRADE AGREEMENTS, TRADE ARRANGEMENTS, TRADE BARRIERS, TRADE CLASSIFICATION, TRADE COSTS, TRADE DEPENDENCE, TRADE FACILITATION, TRADE FLOW, TRADE FLOWS, TRADE INTENSITY, TRADE INTENSITY INDICES, TRADE LIBERALIZATION EFFORTS, TRADE PATTERNS, TRADE POLICIES, TRADE POLICY, TRADE POLICY INSTRUMENTS, TRADE REFORM, TRADE RESTRICTIONS, TRADE VOLUMES, TRADING PARTNERS, TRANSACTION COSTS, TRANSACTIONS COSTS, TRANSITION PERIODS, UNILATERAL ACTION, VALUE OF TRADE, VOLUME OF TRADE, WAGES, WORLD ECONOMY, WORLD MARKET, WORLD MARKETS, WORLD PRICES, WORLD TRADE,
Online Access:	http://documents.worldbank.org/curated/en/2002/10/2050411/initial-conditions-incentives-arab-economic-integration-can-european-communitys-success-emulated https://hdl.handle.net/10986/19233
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