Heard about Gatt?
SHOULD MIDDLE EAST economies take much notice of last December's Gatt accord? There has been little public response in the region to long-awaited completion of the Uruguay round of General Agreement on Tariffs and Trade negotiations (Gatt). This is worrying because it betrays a general lack of official interest in the implications of the accord.
Few Middle Eastern countries are members of Gatt but all must share the general sense of bafflement at the confusing package of changes reached after talks which seemed interminable. Although Middle East countries were peripheral to the negotiations, they cannot remain immune to the widerranging effects of the accord's implications.
Egypt, Turkey, Israel, Kuwait and Bahrain are signatories to Gatt. Saudi Arabia is seeking to join, while Jordan and Iran are considering membership. Even the countries of the region which have taken no more than passing notice of the Gatt talks will be forced to adapt their trade policies to the regime planned by the organisation as a pattern into the next century.
There are three reasons why Middle Eastern countries have taken little interest in Gatt's tortuous deliberations. Most importantly, the talks have been dominated by commercial quarrels between the United States, Japan and the European Community (now the European Union). Although all three have kept a wary eye on the challenge posed by the newly-industrialised countries, other trading states have played a minor role in the talks.
Second, Gatt has not so far taken hydrocarbons into consideration. Since this is the Middle East's most important export commodity and revenue earner, a degree of indifference towards Gatt deliberations is understandable. Third, there are conflicting reasons why countries in the region have taken little interest in Gatt's attempts to reduce trade barriers. On the one hand, countries (such as members of the GCC) which are heavily dependent on basic imports already apply low tariffs. On the other hand, many states are intent on jealously guarding trade barriers which are intended to protect sometimes fledgling domestic industries.
What is bound to change, however, is the perception that integration into the evolving Gatt system will be unavoidable. Last December's accord is supposed to lay the ground for the eventual establishment of a new World Trade Organisation. …