This is largely a reprint
of an article which appeared
in the Feb. 2002 issue of
"Export America."
Additional content has been
added to focus on Michigan
exports and to better utilize
the resources of
ExportMichigan.com and other
local resources. For
those interested, Michigan
exports to specific Mideast
countries can be found at: http://ese.export.gov/.
The Middle East and North
Africa (MENA) is a region of
enormous strategic and
economic importance to the
United States. It is a region
of significant commercial
importance to American
business and U.S. companies
have operated profitably there
for many years. The countries
of MENA are moving toward
economic and political
cooperation and integration
and implementing economic
reforms. Increasing
globalization offers the
prospect that opportunities
will continue to grow and
Americans will continue to
prosper in the region.
Michigan Exports to the
MidEast
With
18 countries (and the West
Bank and Gaza) and more than
321 million people, the Middle
East and North Africa region
accounts for 5.2 percent of
the world's population. During
2001, the region purchased an
estimated 3.38 percent of U.S.
merchandise exports and
accounted for an estimated 3.6
percent of U.S. merchandise
imports. Though our exports
slowed in the past few years
due to the drop in oil prices,
our estimated exports to the
region for 2001 were $25
billion up from $24 billion in
2000. The principal product
categories are aircraft and
parts, heavy machinery,
electrical machinery, cereals
and vehicles.
Reform and Globalization
Attract US Companies
In an effort to create
jobs, diversify and grow their
economies, many of the
countries in the region have
embarked on economic reform
and privatization programs to
attract foreign direct
investment. Algeria, Kuwait
and Saudi Arabia are moving
toward opening the development
of their oil and gas fields to
foreign companies and Qatar
and the UAE continue to use
foreign companies as partners
as they expand the development
of their oil and gas
industries. In the last five
years, Egypt, Morocco, Tunisia
and the UAE have undertaken
one or more new independent
power projects. In recent
years, most of the countries
have implemented new
investment laws that allow up
to 100 foreign ownership of
domestic enterprises. Better
laws and stricter enforcement
of intellectual property
protection in many of the
countries have led to
increased investment in the
pharmaceutical industry in
Jordan and in the high tech
industries in Israel and the
UAE.
Several countries have also
embarked on regional projects.
Egypt and Jordan recently came
to an agreement on a pipeline
between the two countries that
could eventually carry gas all
the way to Turkey. Most of the
Arab countries on the Persian
Gulf could soon be part of a
regional gas distribution
network. Qatar, which sits on
the largest known
non-associated gas field in
the world, has reached an
agreement with the UAE on a
pipeline that will carry gas
to Abu Dhabi, Dubai and
eventually to Oman and
possibly South Asia. Qatar is
also negotiating with Bahrain
and Kuwait to sell gas via the
pipeline. Two groups of
countries — those in the
Maghreb (Algeria, Morocco and
Tunisia) and the six GCC
countries (Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia and
the UAE) — have begun the
first phase of connecting
their respective electrical
power grids. The GCC countries
are also making progress on
political and military
cooperation and on integrating
their economies. They expect
to form a customs union by
2003.
The countries of the MENA
region are also getting on the
globalization bandwagon.
Bahrain, Egypt, Israel,
Kuwait, Morocco, Qatar,
Tunisia and the UAE were among
the founding members of the
World Trade Organization (WTO).
Oman and Jordan joined in 2000
and Algeria, Lebanon, Saudi
Arabia and Yemen are in the
process of acceding.
The Middle East has become
an important region for the
development of information
technology. Several countries,
including Egypt, Jordan and
Tunisia, are seeking to
develop their IT industries.
Two countries, Israel and the
UAE, have already taken major
steps to create vibrant IT
sectors. Israel boasts a
high-tech sector that is
successfully integrated with
the global economy. There are
more than 200 U.S. high tech
companies in Israel today,
ranging from the giants, such
as Intel and IBM, to
"specialty"
companies with only a few
employees.
Opportunities for American
firms exist throughout the
spectrum of high-tech fields,
including telecommunications,
defense, software development
and business-to-business
services. U.S. companies
have been very successful in
winning contracts and forming
partnerships to participate in
these developments. More than
$18 billion in investment has
been reported by U.S.
companies in the region in
2000, an increase of 14
percent over the previous year
and 75 percent more than five
years ago. American companies
have been particularly
successful in the oil and gas
industry, in power generation
and water desalination
projects and in the high tech
industries. These
sectors continue to offer best
opportunities for future
business, along with health
care, water and irrigation
technologies and environmental
technologies.
Formal Instruments Enhance
Commercial Ties
The United States currently
has a number of trade policy
mechanisms in place to broaden
economic and commercial
relationships with the
countries of the MENA region.
The first U.S. free trade
agreement (FTA) was with
Israel and was signed in 1985.
The U.S.-Israel Free Trade
Agreement eliminated most
barriers to trade in goods
between the United States and
Israel and has resulted in the
rapid expansion of bilateral
trade that reached more than
$20 billion in 2000.
The United States and
Jordan signed a free trade
agreement in October 2000 and
it came into effect in
December 2001. The U.S.-Jordan
FTA eliminates duties and
commercial barriers to
bilateral trade in goods and
services. It is the fourth
free trade agreement the to
which the United States is a
party and is the first with an
Arab country. Jordanian
companies were already
receiving some preferential
treatment when selling to the
United States through
qualified industrial zones (QIZ)
designations. The United
States grants duty-free access
to products manufactured in
QIZs if those products have
Israeli content and meet other
rules of origin criteria.
The U.S.- Egypt
Presidents’ Council was
established in the spring of
1995 to provide advice and
counsel that reflect private
sector views, needs and
concerns regarding Egypt’s
business climate, including
facilitating private sector
development in Egypt and
strengthening commercial ties
between the United States and
Egypt. President Bush and
Secretary Evans have expressed
their support for continuing
the Council, believing it is
important for governments to
listen to the views of their
business communities to help
create a more favorable
business climate for
businesses to grow and
economies to prosper.
The Council is chaired by
the U.S. Secretary of Commerce
and the Egyptian Minister of
Foreign Trade and its private
sector members are senior U.S.
and Egyptian business
executives. Secretary Evans
and Minister Boutros-Ghali
signed the Memorandum of
Understanding to reestablish
the Council in October 2001.
The U.S.-GCC Economic
Dialogue was established in
1985 and is the primary
vehicle through which the GCC
countries and the United
States discuss trade and
investment issues. Meetings
usually take place annually
and alternate between
Washington, D.C. and the GCC
region. The next meeting is
planned for this year in
Washington. The Commerce and
State Departments co-chair the
U.S. side of the Dialogue.
This government-to-government
forum explores measures to
promote and expand the
commercial and economic
relationship between the
United States and the GCC.
Since the January 1992 meeting
of the Dialogue, the U.S. and
GCC private sectors have had a
role in the meetings, but
private sector participation
has accelerated since
September 1998. The U.S.
private sector, represented by
the American Business Council
of the Gulf Countries (ABCGC)
and the GCC Chambers of
Commerce have participated in
all recent meetings of the
Dialogue. The private sector
has formed a separate
"business" dialogue
and developed a separate
action agenda.
The private sector also
organized two business
conferences in April 1993 in
Washington, D.C. and in March
1996 in Bahrain. A third
business conference will be
held in conjunction with the
plenary session of the
Dialogue this year. As a
result of the Dialogue, the
GCC countries have made great
strides in increasing the
protection of intellectual
property rights, easing visa
restrictions for American
business representatives and
easing restrictions on
investment.
In the summer of 1998, the
United States launched the
U.S.-North Africa Economic
Partnership to enhance the
policy dialogue and break down
barriers to trade and
investment among the countries
of North Africa and between
each country and the United
States. Through the
Partnership, which helps to
advance economic reform and
private sector-led growth in
the region, the United States
fosters a senior-level policy
dialogue aimed at promoting
economic reform and
liberalization. The
Partnership provides the
Maghreb governments with a
platform from which to engage
with potential U.S. investors
and provides focused technical
assistance and training
programs to Tunisia, Morocco
and Algeria aimed at helping
these governments improve
their business and investment
climates.
The Partnership receives $4
to $5 million in funding each
year. Over the past two
years, the U.S. government
launched 24 technical
assistance and exchange
programs with the Maghreb
countries under the . U.S.
experts in commercial law,
insurance reform, debt
management and other fields
have shared their expertise
with their North Africa
counterparts. Ongoing
activities of the Partnership
also establish links between
North African universities and
American institutions of
higher learning, permitting
faculty exchanges in fields
linked to business. Each
spring, the Under Secretary of
State for Business, Economic
and Agricultural Affairs has
hosted a meeting in Washington
with the economic ministers of
each country. Mauritania
participated in the May 2001
meeting for the first time.
The Trade and Development
Agency also held a trade and
investment conference on North
Africa in November 2000,
bringing together American and
Maghreb companies to explore
opportunities.
The United States has in
place Bilateral Investment
Treaties (BITs) with Bahrain,
Egypt, Jordan, Morocco and
Tunisia and we are discussing
BITs with Kuwait, Qatar, Oman
and Saudi Arabia. The United
States also has entered into
several Trade and Investment
Framework Agreements (TIFA).
The bilateral council formed
under each TIFA serves as a
forum in which to discuss ways
to break down barriers to
bilateral trade and
investment. The TIFA with
Jordan led to the U.S.-Jordan
Free Trade Agreement. We also
have a TIFA with Algeria,
Egypt and Morocco and we
expect to sign with Tunisia in
the near future.
U. S. Government Programs
Facilitate Commercial Ties
with the MENA Region
The Commerce Department’s
Commercial Law Development
Program (CLDP) is active in
Egypt and North Africa to
support host government
economic reform and trade
liberalization efforts. CLDP
operates in North Africa under
the U.S.-North Africa Economic
Partnership and |helps to
develop policies and
regulations that are
consistent among Morocco,
Tunisia and Algeria in areas
such as export/import laws,
product standards and
intellectual property
protection. Commerce’s
Technology Administration is
cooperating with the Egyptian
Ministry of Communications and
Information Technology in
organizing an information
technology partnership
conference in Alexandria,
Egypt in spring 2002. The
Technology Administration is
also preparing to assist
interagency, non-governmental
organizations and private
sector partnerships to
implement applications of
advanced U.S. technology to
help mitigate the serious
water shortage in Jordan.
The Export-Import Bank of
the United States (Ex-Im Bank)
is the official export credit
agency of the United States.
In its 65 years of service,
Ex-Im Bank has helped to
support more than $400 billion
of U.S. exports worldwide. Ex-Im
Bank’s mission is to match
officially supported foreign
competition and fill financing
gaps to maximize support for
U.S. exports and contribute to
the promotion and maintenance
of U.S. jobs. Ex-Im has
programs in almost every
country in the Middle East and
North Africa (the exceptions
are Iran, Iraq, Libya,
Palestinian Authority and
Syria).
The Overseas Private
Investment Corporation (OPIC)
supports U.S. businesses that
invest in developing countries
and emerging market economies,
which creates U.S. jobs,
increases U.S. exports and
promotes economic growth at
home and abroad. In
addition to fostering American
global competitiveness, OPIC
considers an investment’s
impact on the U.S. economy,
the environment and rights of
workers in the host country.
OPIC will support projects in
Algeria, Bahrain, Egypt,
Israel, Jordan, Kuwait,
Lebanon, Oman, Morocco, the
Palestinian Authority, Saudi
Arabia, Tunisia and Yemen.
The U.S. Trade and
Development Agency (TDA)
assists in the creation of
jobs for Americans by helping
U.S. companies pursue overseas
business opportunities.
Through the funding of
feasibility studies,
orientation visits,
specialized training grants,
business workshops and various
forms of technical assistance,
we enable American businesses
to compete for infrastructure
and industrial projects in
middle-income and developing
countries. TDA is active
in every country in the region
with the exceptions of Syria,
Libya, Iraq and Iran.
- For travel advisories and
general country information: www.state.gov
- For country commercial
guides, market research, and
trade statistics: www.export.gov
- For federal export
assistance programs, the Trade
information Center: www.export.gov/tic
or 1-800 USA TRADE (872-8723)
- For specific market access
and compliance problems, the
Office of the Near East:
(202)482-1860
Countries of the Middle
East and North Africa:
Algeria, Bahrain, Egypt,
Iran, Iraq, Israel,
Jordan, Kuwait, Lebanon,
Libya, Morocco, Oman, Qatar, Saudi
Arabia, Syria, Tunisia,
United Arab Emirates, Yemen.
Linked countries refer to
WebGuides, comprehensive
sources of country specific
information, located elsewhere
in ExportMichigan.com.
Available Market Research
A variety of market
research pertinent to
Michigan's MidEast Exports is
available from you local
office of the US Department of
Commerce:
In addition, we suggest
that you check out the
Canadian Governments website
at:
Date Updated: March 27, 2007
