- The Washington Times - Monday, June 23, 2003

SOUTHERN SHUNEH, Jordan (AP) — Arabs welcomed a U.S. plan for a Mideast free-trade zone in 10 years but worried yesterday that it would be tough to implement in the volatile, economically struggling region.

Secretary of State Colin L. Powell and other officials outlined the plan on the closing day of the special World Economic Forum summit, which focused on the region’s crises.

“With peace you need economic development or people will not benefit,” Mr. Powell said at the summit,” which drew about 1,100 business, political and civic figures from around the world.

Questions about security and access have held up the benefits of a free-trade deal the United States signed with the Palestinians in 1995, U.S. Trade Representative Robert B. Zoellick said. A free-trade agreement Jordan signed with the United States after making peace with Israel has been a “driver for acceleration of growth,” said Jordan’s trade minister, Salah Eddin Bashir.

At the conference, Jordan and Israel agreed to create more industrial zones where businesses from the two countries jointly produce goods to sell in the United States. The U.S. government allows the products to enter free of tariffs and quotas.

Yasser Abbas, son of Palestinian Prime Minister Mahmoud Abbas and a Palestinian businessman, said the proposed regional deal could encourage peace and development.

“I know countries are running toward such a proposal,” he said.

The region’s current share of international trade and foreign direct investment is among the lowest in the world.

Mr. Zoellick blamed that decline on several factors, including “old hatreds, political instability, corruption, bureaucracies and the privileged few who resist the competition of economic reform.”

At a news conference with Mr. Powell, Mr. Zoellick said the U.S. initiative for a regional free-trade area, announced last month, was part of the Bush administration’s plans before the Iraq war to help regional development.

“We recognized it was important to not only have a secure environment in military terms,” but economically as well, he said.

Mr. Zoellick said Washington would seek to “create the opportunity” for Iraq to move from a stagnant, state-controlled economy to open markets and free trade.

But he and Mr. Powell insisted the United States would not impose a free-trade agreement on the country. “It’s up to the people of Iraq ultimately to make that decision,” Mr. Powell said.

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