Beirut, 8 November 2018 (Communication and Information Unit)--In several Arab countries, the services sector accounts for large and growing shares of output, employment and foreign direct investment. Accordingly, the United Nations Economic and Social Commission for Western Asia (ESCWA) today launched the second edition of Assessing Arab Economic Integration Report (AAEIR) this year focused on Trade in Services as a Driver of Growth and Development, which looks into the role of services trade in development in the Arab region.
The Director of the Economic Development and Integration Division (EDID) at ESCWA, Mohamed El Hacene, presented the report and stressed: "The reason why this topic is being tackled is because of the important role played by services trade in production, employment, investment and trade and its many direct and indirect effects on other production sectors."
The report argues that services trade liberalization is a potent means to achieve the Sustainable Development Goals (SDGs), significantly more so than merchandise trade liberalization. It illustrates the nexus between services trade liberalization and some selected SDGs, covering gender equality and empowerment, poverty reduction and income distribution, and greenhouse gas emissions.
In this context, Mohamed Chemingui, Chief of the Regional Integration Section at ESCWA, said that “the services trade liberalization is an important and unavoidable policy challenge for Arab countries that, if pursued well, promises to yield great gains to Arab development.”
The analysis shows that trade links among Arab countries have been strengthening but still remain marginal, with the notable exception of the Gulf Cooperation Council (GCC). It also finds that Global Value Chains have become critical to economic development and that Arab countries should try to enhance the Pan-Arab Free Trade Area (PAFTA) and the Deep and Comprehensive Free Trade Agreements (DCFTA) to respond to this new reality.
The first chapter presents Recent Developments in the Intraregional and Global Economic Integration of Arab Countries and substantiates the great variation within the region in terms of inter- and intraregional economic relations; the second discusses The Economics of Services Trade and finds that progress in the services trade area is likely to bring enormous economic gains to all countries in the world.
The third chapter examines the Performance of and Barriers to Trade in Services in the Arab Region while the fourth delves into Economy-wide and Cross-cutting Impacts of Promoting Trade in Services in the Arab Region in the Context of PAFTA and DCFTA.
“I believe this report is technically one of the most important reports around the world,” said Hakim ben Hammouda, an economics professor at the University of Grenoble in France .
“My assessment is not restricted to this report only, as I have witnessed, from the very first report, the important role played by ESCWA in order to understand the causes of weak Arab economic integration, develop the necessary policies to overcome this weakness and make Arab economic integration a pillar of development and economic progress in the region,” he added.
Mr. ben Hammouda, who is a former minister of Finance in Tunisia and former Chief Economist at the United Nations Economic Commission for Africa (UNECA), underlined that the issue of weak Arab economic integration is the focus of all regional institutions, including ESCWA and the League of Arab States (LAS). He noted that "despite the efforts, agreements and attention of the Arab organizations, this integration does not match the aspirations and expectations of the Arab peoples and is not effective enough to play a fundamental role in the development process."
The report was launched during a capacity building workshop on “Non-Tariff Measures: Economic Assessment and Policy Options for Development” organized by ESCWA and the United Nations Conference on Trade and Development (UNCTAD) on 7 and 8 November at the UN House in Beirut.
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