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December 22, 2008

Free Trade and the Middle East
Posted by Ilan Goldenberg

As part of PPI's series of memos to the President Edward Gesser writes about the need for new Middle East trade agreements (PDF).

Why should this be a priority, when you have so much else to do? Because our nation’s relationship with the Muslim Middle East is our gravest challenge. That’s right—even with a financial crisis threatening our economy, it is our troubled interaction with the greater Middle East (defined, for these purposes, as the band of nations running from Morocco to Pakistan) that truly represents the most serious threat to our national security and well-being. 

And so far, none of our efforts to stabilize or pacify this region have worked. We have tried aid programs, military action, sanctions, and diplomacy. Each of these approaches has failed to arrest the region’s deterioration.

There is another alternative, one that offers greater promise than anything we have yet attempted. It is trade policy—supported by aid, diplomacy, intelligence, and military capability—that offers the best hope for truly constructive change in the greater Middle East.

This just seems sort of odd to me.  I'm all for free trade.  But really?  This is the transformative policy that is going to eliminate the problems of the Middle East?  I don't buy it. 

First, if we're going to really do something about America's problems in the Middle East (As defined by Gesser going all the way to Pakistan) you might want to deal with our 148,000 troops in Iraq, the festering Israeli-Palestinian conflict that this administration ignored for six years, the mess in Afghanistan and Pakistan.  These are problems of basic security. All the free trade in the world isn't going to do much good in places like Iraq, Gaza, or Afghanistan if you don't get some security first.  It's not fully clear if trade  stop wars.  But wars do stop trade.

Second, there are a whole other set of states where free trade won't do all that much because of structure and governance.  The gulf states are primarily rentier states, whose economies have been so warped by oil that the private sector is really non-existent or dysfunctional.  Other states like Syria and Libya have regimes that are so incredibly repressive and economically illiberal that free trade wouldn't stand much of a chance. 

So like I said.  I'm not against the idea of free trade in the Middle East.  It just feels like Gesser is really exaggerating the possible impact.  I'd probably put it pretty far down on the list of priorities. 


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