Remarks by US Trade Representative Robert B. Zoellick at the Middle East Free Trade Area Coalition

Well, thank you very much Jeff. It’s a real pleasure to be here with all of you. And it’s a tremendous group. I’m really excited about the number of people you’ve been able to bring together to help launch the Middle East Free Trade Area Coalition. I also know that Bill Reinsch with the National Foreign Trade Council as well as the Business Coalition for International Understanding have really taken the (unintelligible) on this provided a lot of leadership to put this coalition together and this is certainly a testament to the hard work of both of you and your organizations.

I see many friends here today around the room. I’m delighted. I think we’ve been working together and we’ve been succeeding together.  The coalitions that you have launched in different areas have helped us build important results for American workers and farmers and  ranchers and businesses.  This summer, as all of you know, Congress approved two new free trade agreements with Australia and Morocco.  And we hope that Congress will follow up soon by passing our Free Trade Agreements with Bahrain and the Central American countries.  That will mean new exports, new jobs, new rules that will strengthen our enforcement powers, and new opportunities.

But today we gather for a purpose that draws together our work on free trade but to achieve an even larger goal. In May 2003, President Bush announced his vision of a Middle East Free Trade Area that’d span North Africa’s Mahgreb to the Levant, at the crossroads of Africa and Europe and Asia, and onward to the Persian Gulf and the east.

President Bush made our goal very plain: “to bring the Middle East into an expanding circle of opportunity, to provide hope for the people who live in that region.” The goal is ambitious.  By helping people of the Middle East develop a greater, constructive stake in the world economy and build a better future, we undermine the recruiters for extremism and destruction.

This summer, the 9/11 Commission backed the President’s goal with a unanimous recommendation urging the United States to expand trade with the Middle East as a way to “encourage development, more open societies, and opportunities for people to improve the lives of their families.”

Now, poverty does not cause terrorism.  In fact, as we’ve seen. Many of those who turn to violence, targeting the innocent, even children, are often from the middle class, they’re college-educated, even some from wealthy families.  And certainly countless millions of the world’s poor do not turn that into a justification for inhumanity. Nevertheless, stagnant and repressive societies that leave people no vision of a better future spawn anger and despair, and those are the fertile fields for terrorism. 

Economic reforms that help open the window for the light of hope and the breeze of opportunity change more than just the business climate.  Economic and political freedom and openness are tied together.  The 9/11 Commission wrote:  “Commerce, especially international commerce, requires ongoing cooperation and compromise, the exchange of ideas across cultures, and the peaceful resolution of differences through negotiation and the application of the rule of law.  … Those who develop the practice of controlling their own economic destiny soon desire a voice in their communities and their broader societies.”

The 9/11 Commission recognized that for too long, the Middle East has been a place of backward economies, religious extremism, and lack of opportunity.  Democracy has been rare, small businesses have been stymied by the government help for a favored few, while militants want to turn the back the clock to the Seventh Century. 

Trade is a tool to help change that picture. The Middle East’s share of international trade and foreign direct investment is among the lowest in the world.  On a per capita basis, exports aresignificantly lower today than they were 20 years ago. With almost five times the population  and the world’s largest reserves of oil, the entire economy of the Middle East is barely as large of that as France and Belgium put together.  

Now, the Middle East has not always been this way.  Indeed, the civilizations born there were pioneers of open markets and trade.  The Quran urges the faithful to "Let there be trading by mutual consent."  For centuries, the people of the Middle East followed that word, creating the world’s preeminent bazaar and a culture renowned for commercial prowess. The wealth provided for resources that went to science, mathematics, art, and architecture and these were some of the areas that pushed the boundaries of human knowledge at that time.

Moderate Arab states such as Morocco and Jordan, and Bahrain are now reclaiming the ideas of this greater Islamic past.  Their reformist and tolerant vision of Islam includes free parliamentary elections, the sale of state-owned businesses, a new welcome for foreign investment connected to broad-based development, and protections for the rights of women and workers. 

In Morocco, Bahrain, Jordan, and elsewhere, young leaders are striving to win a battle for the soul of Islam.  It’s a battle of leaders who embrace tolerance against extremists who thrive on hatred.  It’s a struggle of economic reformers against those who fear modernization because it threatens their power to intimidate.  And it’s a contest of those who welcome closer ties with the West against those who see us as an enemy.

America’s strategic interest in the outcome of this struggle is immense, but our ability to influence it is modest.  From the Middle East to Southeast Asia, only fellow Muslims can persuade their brothers and sisters of the Islamic future.  It’s got to be their choice. But the United States is not without influence, for economic development and open societies are important tools of change.  Through free trade agreements we can embrace reforming states, encouraging their transformation and bolstering their chances for success even as we open markets for America’s goods and services.  

The United States has now negotiated Free Trade Agreements with Jordan, Morocco, Bahrain.  And in close partnership with the Congress, and the help of many of you in this room, the Jordan and Morocco Free Trade Agreements were passed with bipartisan support, and we hope the Bahrain FTA will also see favorable consideration soon.

The FTA with Jordan was the very first step enacted in 2001.  Closer trade ties have resulted in a 197% increase in two-way trade and they’ve drawn foreign investment to Jordan, including knowledge and entrepreneurial industries such as pharmaceuticals and software.  The Jordanians have estimated that expanded trade has helped to create some 35,000 new jobs. 

Morocco and Bahrain are now integrating their new FTAs with the development of their countries. The United States has also signed trade and investment framework agreements with nine other countries, from Algeria to Yemen, as a preliminary step toward free trade.  Piece by piece, the Administration is building a network of modernizers. 

The United States is working with the countries that are not yet in the World Trade Organization (WTO) to become full participants in the global rules-based trading system.  We’re delighted that Iraq has now joined as an observer to the WTO. 

The United States is unilaterally lowering its trade barriers with the poorest Arab nations through the “Generalized System of Preferences,” the GSP.   And U.S. trade capacity building aid programs can now assist countries to try to take better advantage of these benefits, enhancing business links between the United States and the Middle East.

The Administration’s strategy is to try to link our new FTAs to one another, opening trade not just with the United States, but also among Middle Eastern countries. 

I leave next week to visit the United Arab Emirates and Oman to prepare for beginning possible additional FTA negotiations to keep up our momentum, as I have already discussed with the Congressional Oversight Group.  I will also meet with business leaders and officials in Jerusalem, in a tribute to the upcoming 20th anniversary of the FTA with our close partner Israel, our 1st in this modern era of trade.

Now I know these plans sound ambitious.  But I have seen the impossible happen even in my own lifetime.  I have seen China shift from the debacle of the Great Leap Forward to accepting and implementing the market rules of the World Trade Organization.  I’ve seen a divided Germany united at the center of a peaceful Europe. A vibrant and renewed Middle East is within our grasp if we reach out our hands to help.

I appreciate that you have come here today out of a desire to try transform the President’s vision into a pratical reality.  We can do that if we work together. 

We can combine doing good with doing well.  Opportunity abounds in the Middle East.  The region is already an important market for America’s manufacturers, our service firms, ranchers, and farmers.  As we build the Middle East Free Trade Area, these opportunities will only multiply.

When the Middle East is finally at peace and its people have reclaimed their place as leaders in science and business and culture, I think Americans will be vert proud -- not just because commerce will make all of us better off -- but because something noble and inspiring will be reborn.

Thank you for your leadership and help. We reallly appreciate it.