Liberalization of Trade in Services among Arab Countries from Dream to Reality: End of the Beirut Round of Negotiations

Rima Younes El-Khatib, 13 Feb 2017

From goods to services… 

In February 1981, the Arab countries have concluded the Agreement to Facilitate and Develop Inter-Arab Trade. However, this agreement did not enter into force until February 1997, when it was agreed on drafting an executive program for the Agreement in order to establish a “Greater Arab Free Trade Area – GAFTA”.


The implementation of the GAFTA began in the first quarter of 1998 with a gradual liberalization through an annual reduction of 10% of customs duties and taxes with equivalent effects. Goods were scheduled to be traded duty-free among the members within a period of 10 years. In early 2003, customs were reduced by 60% compared to their levels by the end of 1997. Subsequently, it was agreed to accelerate the establishment of a free area through the implementation of an annual reduction rate of 20% starting early 2004, and of another 20% starting early 2005. Thus, zero-bound duties were applied on goods of Arab origin and traded among the Arab countries that are members of the GAFTA, early 2005. To date, eighteen Arab countries have joined the GAFTA, namely: Jordan, UAE, Bahrain, Tunisia, Saudi Arabia, Sudan, Syria, Iraq, Oman, Palestine, Qatar, Kuwait, Lebanon, Libya, Egypt, Morocco, Yemen and Algeria.


So far, the GAFTA covers trade in goods only, and not in services. As for the Agreement to Facilitate and Develop Inter-Arab Trade, it did not clearly mention trade in services; services were only brought up in Article 2 of the Agreement, as follows: 


Article 2: 
This Agreement targets the following: 
3- Facilitating the financing of inter-Arab trade exchange and settling the payments resulting from this exchange. 
4- Granting special concessions to trade-related services among the Member States.


Moreover, the Agreement’s executive program did not refer to any specific measures related to the liberalization of trade in services, but has called in Article 8 on holding deliberation sessions between the Member States on trade-related services. 


Given the linkage between trade liberalization and other economic activities, the Member States parties should deliberate on:

Services and particularly trade-related services… 


The Lebanese Government Initiative: An Agreement on the Liberalization of Trade in Services


The Arab summit, held in Amman in March 2001, stipulated the initiation of the study related to the integration of trade in services in the GAFTA. Subsequently, the Lebanese Republic officially submitted a draft Trade in Services Liberalization Agreement (the General Provisions of the Inter-Arab Trade in Services Liberalization Agreement) during the Economic and Social Council meeting going over the preparations for the fourteenth Arab summit that was held in Beirut in 2002. The summit ratified the draft agreement in a resolution that referred to the Lebanese initiative and called on the Arab states to launch the negotiations to sign an agreement related to the liberalization of trade in services among the Arab states. 


This was followed by three Arab Experts Meetings in Beirut in 2002 and 2003 to discuss the draft agreement submitted by Lebanon. The draft agreement was agreed upon and ratified by the Economic and Social Council of the Arab League in 2004; it has called on the Arab States to launch the negotiations related to the schedules of commitment as part of a round of negotiations titled: The Beirut Round of negotiations on the liberalization of trade in services among the Arab States.


Launching the “Beirut Round” and Initiating the Bilateral Negotiations 

The first meeting of the Beirut Round was held on 07/10/2004 and was attended by five Arab States: Jordan, UAE, Qatar, Lebanon and Egypt, in addition to the General Secretariat of the League of Arab States and a representative of the Economic and Social Commission for West Asia (ESCWA).
The negotiations meetings stretched over a period of 12 years, starting in 2004 and ending on the 1st of February 2017, the date of the final negotiations meeting held in Beirut. 


The Closure of the “Beirut Round” after 12 Years of Negotiations 

The Beirut round was concluded on the 1st of February, 2017. During this last meeting, it was agreed on the schedules of commitment for nine countries, the agreement’s founding members, namely: UAE, KSA, Qatar, Oman, Morocco, Lebanon, Egypt, Yemen and Sudan. 


Originally written in Arabic


Rima Younes El-Khatib is head of the International Relations Division at the Foreign Affairs Department of the Central Bank of Lebanon. She is member of the Lebanese Official Delegations for multilateral, regional and bilateral Trade in Services Negotiations, namely she is the Chief Negotiator for Services with the World Trade Organization (WTO), the European Union (EU), and Arab countries. She is currently pursuing her PhD studies in International Relations and Diplomacy.


The views expressed here are solely those of the author in his/her private capacity and do not in any way represent the views of neither the Arab Development Portal nor the United Nations Development Programme. 

Rima Younes El-Khatib Rima Younes El-Khatib

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