GAFTA is an executive program established in the Social and Economic Council of the Arab League. It was established to activate the Trade Facilitation and Development Agreement. It came into effect on January 1st, 1998. 

History

With many efforts launched in the 1950s and 1960s, the League has a long history of attempting to promote trade and economic cooperation among its member states. An agreement to encourage and ease trade between Arab nations was struck in 1981, however, it had little impact. The Arab Free Trade Area, also known as the Greater Arab Free Trade Area or the Pan-Arab Free Trade Area, was decided to be established by the League in February 1997. This would be accomplished by gradually removing trade restrictions in addition to a yearly decrease in customs duties of 10%. This agreement included 18 of the 22 Arab League member states’ signatures. The decision to expedite the liberalization process was made in March 2001, and the majority of tariffs among the GAFTA members were finally eliminated on January 1, 2005.

GAFTA

In 1997, the Greater Arab Free Trade Area (GAFTA), was established. 14 nations—Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, and the United Arab Emirates were involved in its founding. GAFTA was created when the Arab League’s Economic and Social Council (ESC) approved the agreement to promote and facilitate commerce among Arab nations. At a conference in Amman, Jordan, the Agreement was ratified by seventeen League member countries. 2008 saw Algeria’s entry into GAFTA. The ESC is in charge of managing GAFTA.

Member states

GAFTA is made up of the following 17 nations: Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen. The process of others joining is underway. By meeting the following criteria, the members trade in 96 percent of all intra-Arab commerce and 95 percent of all international trade:

Specify the inter-customs charges

The 14 Arab governments submitted their custom tariff strategies for coordination with the Arab League Security Council to cut the tariffs on Arab products by 10% annually. Syria, which employs the Brussels customs system, was excluded.

Applying the region of origin of Arab goods

To ensure that their products may move easily from one nation to another, all members have shared their norms and specifications.

Pact for Arab Agriculture

The League has also developed a plan to implement the Arab Agriculture Pact, which introduces some limits and specifications as well as a set of standards for the agricultural industry. Six members of the League were given exceptions by the Arab League, allowing them to pay a lower customs rate for a variety of commodities

Private industries

To inform and promote the advantages of the private sector, the League established a database and a service.

Communication

To facilitate cooperation between the public and private sectors and advance the GAFTA, the Economic and Social Council agreed at its 65th meeting to establish a platform for communication between member states.

Duties to customs

Following the decisions made at the Amman summit, the members will work to get rid of all customs duties on local goods, the Economic and Social Council decided at its sixty-seventh meeting. Customs on goods have decreased by 40% over the past four years of the GAFTA.

Duty-Free items

Between January 1, 1998, and January 1, 2005, which was the deadline set for the creation of the AFTA, all trade between Arab member nations was subject to a gradual phase-out. According to the agreement made during the implementation process, Member nations were permitted to schedule specific commodities for quick liberalization during the liberalization process. The following products are covered by the FTA: Products from agriculture and animals, whether they are unprocessed or processed. Depending on the production season, member nations have the option to exclude some agricultural products from tariff reductions during the liberalization process. All agricultural products are now, however, exempt from customs duties and other fees and penalties with a comparable impact as of January 1, 2005. By 2005, the reduction rates had fallen to zero.