Greater Arab Free Trade Area has great potential says Qatar National Bank

Report says further reduction of custom duties and other barriers to trade will boost area’s economic integration

Trade in the GAFTA grew 11% in 2012, a QNB report has said.

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The full implementation of the Greater Arab Free Trade Area (GAFTA) has the potential to achieve greater economic integration, the Qatar National Bank said in an analysis.

The trade of the 18 countries in the Gafta grew 11% in 2012 to $2.1 trillion, QNB yesterday said citing latest IMF trade data.

Gafta has a high trade surplus versus the rest of the world with exports totalling $1.2tn in 2012 and imports $0.8 trillion. The trade surplus of $400bn in 2012, or around 15% of Gafta GDP, has grown steadily since 2009 when it contracted to $64 billion as oil prices averaged lower.

Further reduction of customs duties and other barriers to trade will boost the area’s economic integration, the report added.

It was hoped that a final agreement on a unified customs regime could be reached at the Arab Summit in Doha in March 2013, clearing the way for full implementation of a genuine free trade zone by 2015.

A proposal for such an agreement was completed by the Arab Economic and Social Council and just required the approval of Arab leaders.

However, other regional issues dominated proceedings at the summit, leading to a possible delay in the full implementation of the free trade agreement.

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