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OVERVIEW OF SELECTED MENA ECONOMIES 37


in March 2007. This agreement is seen as a first step toward the implementa- tion of a larger Pan-Arab FTA and is open to other countries in the region that are in the EMP or have implemented GAFTA. Provisions of the agreement are as follows:


• full exemption from the custom fees, charges, and other taxes of similar effect on the exchange of agricultural goods, processed agricultural goods, and industrial goods;


• adoption of the Euro-Mediterranean rules of origin, which authorize the cumulation of origins and the free circulation of goods within the Euro- Mediterranean area through the adoption of a circulation certificate;


• commitment to national treatment for the exchanged goods; and • treatment of the services trade in accordance with the obligations of the WTO member countries.


So, in addition to the liberalization of goods along the lines followed in GAFTA, the agreement makes provisions for the trade liberalization of ser- vices within the framework of the General Agreement on Trade in Services. Much as in GAFTA, NTBs are to be completely eliminated as soon as the agreement comes into effect, and exemptions are permitted to protect local production from substantial damage, infant industries, or sectors under re- organization. These exemptions are to be applied restrictively and for a lim- ited period. On issues such as subsidies and antidumping measures, disequi- libria in balances of payment, intellectual property rights, and sanitary and phytosanitary measures, the agreement explicitly refers to the WTO regula- tions. It also calls for the coordination of global and sectoral economic poli- cies and a certain harmonization of the economic legislation and standards of the respective partners (Wippel 2005). The Agadir Agreement is expected to have limited trade effects given the lack of complementarity between the few current members, but it seems to build on provisions that are more compatible with the global environment than is GAFTA, and it may hold more promise once it is extended to the rest of the Arab countries.


Other Regional Agreements


Other regional agreements include those that led to the creation of the Arab Maghreb Union (AMU) and the Gulf Cooperation Council (GCC). The AMU was established in 1989 among all five Maghreb countries: Algeria, Libya, Maurita- nia, Morocco, and Tunisia. The aim was to establish a customs union by 1995 and an economic common market in 2000. Neither objective was achieved because the AMU was faced with two major obstacles: the requirement of unanimity for all decisions to be implemented and the eruption of political tensions between Algeria and Morocco over the western Sahara, which led to


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