U.S. urged to boost trade with Muslim countries

U.S. urged to boost trade with Muslim countries

Doug Palmer, Reuters, Washington

The United States should add an economic component to its war on
terrorism by making a strong push to integrate Muslim countries
into the world trading system, several trade experts said this
week.

"What's clear is that since 1980 the population of the Muslim
Middle East has nearly doubled and at the same time it's share of
global trade has plummeted 75 percent," former U.S. Trade
Representative Charlene Barshefsky told Reuters.

"This is a very dangerous situation for the United States.
U.S. trade policy must turn its attention to programs that
enhance the integration of the Muslim Middle East, including with
Israel ultimately."

The United States should work with other Western nations to
bring Muslim countries like Saudi Arabia and Algeria into the
World Trade Organization and should consider preferential trade
packages to help them diversify their economies, she said.

Outside the oil sector, many Muslim countries have few
products they export to the rest of the world. The dearth of job
opportunities, combined with a well educated and frustrated
population, has created a volatile mix, Barshefsky said.

Ed Gresser, director of the trade and global markets project
at the Progressive Policy Institute, said a few statistics
illustrate how Muslim countries in both the Middle East and Asia
lag in economic development.

Since 1980, the share of world trade held by the 57 member
countries of the Organization of the Islamic Conference has
fallen from 15 percent to just 4 percent.

The same countries -- with a combined population of 1.3
billion -- attracted US$13.6 billion worth of foreign direct
investment in 2001. That is just $600 million more than Sweden,
which has 9 million people.

With more Muslims living in cities and fewer jobs available,
"you have an economic environment that is naturally going to
create angry and radicalized people," said Gresser.

A preferential trade package could help deal with that problem
by providing more job opportunities to young Muslim men
addressing an apparent unintentional tilt in U.S. trade policy
against Muslim countries, he said.

While the United States has cut tariffs on textiles and other
products for countries in Latin America, the Caribbean and sub-
Saharan Africa, it has not developed a similar package for Muslim
countries. As a result, countries like Bangladesh, Pakistan,
Tunisia, Egypt, Turkey, Indonesia and Morocco face U.S. tariffs
of 15 percent or higher on many exports.

Mohammed Ghulam Hussain, commercial counselor at the
Bangladesh Embassy in Washington, said the Bush administration
has ignored his country's request for a preferential trade
arrangement like the one for Africa and the Caribbean.

"We approached the U.S. government for similar treatment, but
the response has not been positive," Hussain said.

More than 80 percent of Bangladesh's exports to the United
States are textiles. Those have taken a huge hit recently because
other countries can ship their goods duty-free, but Bangladesh
still faces tariffs of 16-17 percent, he said.

The United States does have a free trade agreement with one
Muslim country -- Jordan -- and will begin talks with Morocco
later this month on a similar pact. But Raj Bhala, a professor of
international trade law at George Washington University, said a
much more aggressive effort is needed to integrate Muslim
countries into the world trading system.

"When you're starting with Morocco, you're starting at the
margin and working in. I'm not sure that we have enough time. I
mean suicide bombs are going off every day," Bhala said.

The problem of developing a U.S. trade strategy for Muslim
countries is complicated by long-standing U.S. sanctions on Iran,
Iraq, Syria and Libya because of concerns that they support
terrorism. The United States routinely blocks efforts by Iran,
Syria and Libya to join the WTO, Bhala said.

"I think as a political matter the U.S. position will remain
unchanged" because of policy decisions those countries have made,
said Barshefsky.

Even so, the United States should step up its effort to work
with other Muslim states on their WTO bids, she said.