The US government yesterday finalized a new Investment pact with the Gulf Cooperation Council on the Sidelines of the UN General Assembly meeting, capping off a week of new efforts aimed at enhancing the economic ties between America and the Middle East. Though the US government currently has bilateral trade agreements with each of the individual countries that make up the GCC, this new Trade and Investment Framework Agreement will provide a platform for working out the details required to ultimately negotiate a regional free trade agreement with a group of economies that represent $100 billion in annual US trade.
This announcement comes on the heels of two recent moves by the US Export-Import Bank that will authorize a total of $7 billion in loans for two major infrastructure projects in the UAE and Saudi Arabia – deals that the Census Bureau projects will create more than 23,000 new American jobs. Facilitating capital investments and helping build two-way economic relationships are efforts that the US government does particularly well, and should be a larger part of the conversation around the engagement strategy with the transition countries in the Middle East. In a recent op ed, Mona Yacoubian made clear the potential benfits:
A holistic approach that focuses on political change, economic growth and regional security would begin to redress the region’s pressing problems. Promoting intra-regional trade—currently only a fraction of its potential—as well as regional trade with global markets would tap the synergies that straddle economic development and security. Facilitating small and medium enterprises would fuel a critical, untapped engine of job growth. Demonstrating the concrete benefits of private sector growth would begin to win over Arab publics who currently view economic liberalization with deep suspicion given decades of crony capitalism.
As the congressional appetite for new aid to the region dwindles, it becomes even more important that the US government leverage its ability to stimulate economic development and jobs growth in the Middle East through the tried-and-true strategies of liberalization, boosting foreign direct investment, and empowering those groups working to connect the jobless to the skills and employment opportunities they need to thrive. It will be a long, difficult road to achieve the goal of an open, stable, and prosperous Middle East, but these recent moves to boost economic ties are welcome steps in the right direction.