Council formed to address GAFTA rules of origin
CAIRO: Arab trade ministers met in Cairo on Tuesday to address common product standards issues and form a negotiation group at the World Trade Organization.
Product standards were one of the topics covered in the meeting of 20 officials in a ministerial meeting of the Arab Industrial Development and Mining Organization (AIMDO), an organ of the Arab League that includes all league members except the Comoros, although Iraq was also not represented in Tuesday s meeting.
After three hours of debate, the Qatari candidate Mohamed Yousuf Behzad was chosen as the organization s next director-general and Mohamed El-Shawash of Tunis as Behzad s deputy.
Behzad will take the helm at AIMDO after many years with OPEC and El-Shawash formerly headed the national standards organization in Tunis.
Minister of Trade and Industry Rachid Mohamed Rachid explains that these elections are particularly important because the next administration will implement a newly-adopted regional industrial development strategy.
Few specific matters relating to trade were resolved during the AIMDO meeting, although the organization s Director-General Talaat Ben Dafer highlighted rules of origin as one of the most critical issues that need to be addressed for the Greater Arab Free Trade Area (GAFTA).
It is not in any way possible for trade between Arab countries to increase by a noticeable amount … unless there is an agreement on the rules of origin, says Ben Dafer.
The rules of origin of GAFTA require domestic content to account for at least 40 percent of the total cost of a product. Until now, however, there was no proper mechanism to implement these rules.
Some goods that move from one Arab country to another do not meet the minimum value-added that is required, adds Syrian Minister of Industry Fuad Issa Aljouny, who is also the president of AIMDO. Therefore, there needs to be a body that … determines that a good meets the minimum value-added required.
The ministers therefore agreed to create a standards and accreditation council that will be responsible for the implementation of the rules of origin.
As part of the implementation of the industrial development strategy, the organization also allocated $2 million per year for a period of 10 years for various projects. Half of these funds will come from the private sector.
The projects include support for small manufacturers, funding of research and development and an award for quality.
The organization s regular budget is $4.5 million annually, of which $4 million is due from governments and the balance is raised from the private sector.
The organization s budget of $4.5 million is entirely insufficient, say Ben Dafer, but the new approach of partnering with the private sector and others to take up measures and execute strategies will undoubtedly increase the size of the budget.
The budgetary situation was exacerbated in the past because many member states had not paid their dues in a timely fashion.
Any country that does not pay [its dues] for two consecutive years or part of the two years will be forbidden from voting and from the free services that are provided to it [by the organization], says Ben Dafer.
Twelve trade ministers representing the 12 Arab countries that are members of the WTO also met separately and agreed to form an Arab group at the multilateral body.
The negotiation process in the WTO does encourage such groupings because at the end of the day you need consensus, says Rachid. It is better to [negotiate] as a group than to leave each country on its own because the WTO and the Doha agreement will not be fulfilled until every single country agrees on all the details, which means they have to understand all the details.
The group will subsequently agree on a minimum set of core issues that all members of the group will vote on with the same stance at the WTO.
The issues are complicated and we expect that we will not have common ground on everything, but we are seeking a minimum agreement plus [non-unanimous agreement on] individual interests of countries, says Rachid.
Other issues will be dealt with in a less formal manner based on common interests between specific states.
If Egypt has a specific interest and this doesn t contradict with the [interests of the] other eleven, then they will support it, says Rachid.
Agriculture is an example of one area where Rachid expects consensus despite the diverging characteristics of Arab economies.
I could see the North African countries, for instance, have a position of preferential treatment to agriculture, and we are expecting the Gulf countries to support us in this, although that they have no interest in this, says Rachid.
The preservation of the preferential treatment that is currently afforded to Egypt and other Arab countries under bilateral trade agreements is one of the most important issues, according to Rachid.
We want to make sure that we don t have a dilution of this preferential treatment, says Rachid. We feel that this treatment is helping us in terms of our development and we don t want to see that we are going to forego all these interests and then everybody else will have the same [advantages] as we have.
This is the fourth WTO group in which Egypt is a member. Rachid explains that the country s participation in various groups is complementary.
We are members in the G20, the African group [and] the G90, says Rachid. We have similar situations for many countries, where they have different positions in different groups because usually groups do not cover all the files. For instance, in the G20, we only have the same position with them on the agriculture file but we have no agreement on the other files.