DEAD SEA, JORDAN // US officials arrived in the UAE yesterday as part of efforts to increase trade with the Arab world and help to create much-needed jobs for both sides.
Window on the world:
World Economic Forum The National reports from the heart of the conference in Jordan. Learn more
The US hopes to strike more trade agreements in the Middle East and North Africa (Mena) region and to reduce tariffs holding back the flow of goods and services.
American trade negotiators were visiting Abu Dhabi and Dubai to discuss ways to boost trade and investment, said Miriam Sapiro, the deputy US trade representative, on the sidelines of the World Economic Forum meeting in Jordan.
"We have a pretty good track record with the region but we want to make it better," she said.
"We have nearly half a dozen FTAs [free trade agreements] and nearly a dozen trade and investment framework agreements and are negotiating our 12th with the GCC."
The US is a top five trading partner for most countries in the region, with trade between the two sides expected to hit US$117 billion (Dh430bn) by next year, according to the National US-Arab Chamber of Commerce.
Much of the flow of goods heads one way from the US.
Greater trade flows could help to meet the challenge of job creation in both the US and the Arab world, she said.
With unemployment of 9 per cent in the US, Barack Obama is under growing pressure to find ways to boost employment.
Limiting the president's options, however, are sluggish economic growth and the need to control spending to help to cut the $1.3 trillion budget deficit. Similarly, Mena governments also face an uphill struggle to create up to 25 million jobs by 2020.
But in order to strike trade deals, Mena countries would have to take action as outlined by Mr Obama in May to liberalise their economies, she said. More specifically, she said regional governments had to reduce non-tariff barriers, cut regulations and guarantee intellectual property rights protection.
Tariffs on imports into the region are among the highest in the world, averaging about 12 per cent, said Nemat Shafik, the deputy managing director of the IMF.
"If those came down there would be much more incentives to trade," she said. The US, Europe and other important trading partners, however, also had to do their bit by opening up their markets more to the region's exports such as agricultural goods, she said.
The US is keen to scout alternative markets as it remains locked in a dispute with its second-largest trading partner - China - over the value of the Chinese currency. While Washington wants to support the transition in Arab Spring countries, its capacity to provide foreign aid remains limited by the high US budget deficit, officials acknowledged.
"The single most powerful tool America has to support the Arabs is free trade," said John McCain, a US senator from Arizona and a former presidential candidate. "Such an agreement would not only boost trade between us but it would also help those countries to expand trade among themselves and ultimately transform the region into the thriving nexus of north and south and east-west commerce," said Mr McCain.
In the Gulf, the US has FTAs with Oman and Bahrain, as well as with Jordan and Morocco in the wider region.
Asked if the US was close to agreeing a FTA with the UAE, Ms Sapiro said: "There are a lot of preoccupations on FTAs but what we're looking for is short and medium-term steps that can boost this relationship."
Abdul Aziz Al Ghurair, the chief executive of Mashreq and the chairman of the Arab Business Council, said the process of ncreasing trade and investment through FTAs between the US and the Arab world must involve the region being treated as an equal partner.
@The National brings you the latest from the World Economic Forum @ www.thenational.ae/wef