Business & Economy [Archives:2001/23/Business & Economy]

June 4 2001
Yemen to promote its trade in the Arab Free Zone  

After its joining the Arab Free Trade Zone (AFZ)Yemen intends to increase its exports of non-oil commodities to an Arab common market establishment to be announced in accordance with the executive program supervised by the Arab Economic Unity Council of the Arab League next September.
Commercial sources informed Yemen Times that establishment of the Arab free trade zone aimed at facilitating and developing Arab trade within a large consumer market. This opens opportunities for Yemen to increase its exports to the Arab countries, which would raise the volume of trade and improve the balance of trade, which is now tilting towards Arab imports in Yemen’s favor.
AFZ offers facilities & information to producers & exporters
The source added that by acceding to the Arab Free Trade Zone Yemen will be able to enhance its economic potentials and obtain facilities, information and services to educate local producers and exporters on goals of the executive program. This will develop their productive capabilities according to high quality standards. It will also enable them to compete with other products in the Arab common market as well as expand Yemeni non-oil exports to the Arab free zone member states.
Until next September ,Yemen has the opportunity to apply to the Arab social and economics council for excluding a number of its commodities from gradual tax and customs cuts against similar duties on Arab commodities imported for Yemeni markets for a definite time. Among these goods are salt, tomato paste and mineral water.
Activation of Private sector & joint investment
Liberation of Arab trade scheduled to be finalized in 2002 would be achieved after the Arab Economic Unity Council’s committee has fulfilled all that has been contained in the executive program of the AFZ. The most important chapter of the program is related to non-customs restrictions, duties and taxes levied on Arab commodity imports. But such action requires activation of the private sector in Yemen and every country in the region for the sake of increasing production and the establishment of an Arab investment and trade partnerships, meeting the needs of the common market.
Egypt, Iraq, Syria, Jordan and Libya, the Arab Common Market member states have already liberated their trade. The free zone among them will be established in September this year. This requires Yemen and other Arab signatory states of the Arab Free Zone to speed up measures necessary for activating programs for this market.
Experts on the Arab trade funding program stress the importance of setting up Arab companies with special capital for producing goods in order to bridge food gaps and increase the volume of inter-trade from 8% of world trade volume to 20%.
Figures indicate that the volume of trade exchange between Arab countries is weak in comparison with that of other countries. Total value of Arab trade in 2000 amounted to 14 billion dollars out of 300 billion dollars, the value of Arab trade volume with world countries.
Out of Yemen’s total exports of manufactured goods in 1999 only 6.7% was exports to Arab countries. This year Yemen has exported around 93.3% of its crude oil to non-Arab Asian countries while the percentage of its imports from Arab countries registered 29.5% of the total imports
It is observed that Yemen’s joining of AFZ is facing some hindrances and challenges that should be overcome according to the following measures:
–Developing industrial products.
–Increasing agricultural production; especially cotton and coffee.
–Providing necessary ways and capabilities for marketing and facilitating products reaching the Arab Free Trade Zone.
— Adequate planning for importation of products from Arab markets .
–Encouraging banks’ commercial sectors to take the initiative in increasing production and exportation.
There are no Arab organizations for protection of intellectual property and registering patent rights. Therefore guarantee of Yemen’s trade exchange within the frame of the Arab free trade zone necessitates participation of all the zone member states in the organization for the protection of intellectual property.
Protection of intellectual property of inventors and private sector exporters to the free zone is their legitimate right against any confiscation of their inventions. This measure of providing protection encourages the increase of sumptuary partnership among the zone’s member states and foreign capital.
According to reports issued by the Arab Economic Unity council, 14 Arab countries have committed themselves to implement the executive program of Arab Free Trade Zone. The Arab countries are Egypt, Bahrain , UAE, Tunisia, Iraq, Oman, Jordan, Qatar, Libya, Morocco, Lebanon, Kuwait, Syria and Saudi Arabia.
This bloc would help Yemen enlarge agreements of investment and trade partnership with the Arab group; and it would reflect positively on the balance of trade, in favor of Yemen’s exports to the Arab Common Market.