The President proposed a free trade initiative that offers a vision of openness, trade integration, and economic development for the Middle East. The Administration will work with Congress to launch new free trade agreements with Middle Eastern countries. In addition, the United States will pursue other measures that will enable Middle Eastern economies to build intra-regional trade, closer links with the United States, and integration with the global economy through trade arrangements tailored to their circumstances and progress with reforms. In combination, these projects will ultimately lead to a U.S. - Middle East Free Trade Area (MEFTA).

The initiative also includes measures to stimulate trade and investment in the Middle East and to build the capacity of countries to take part in trade negotiations, implement the agreements, and benefit fully from trade liberalization.

The United States is proposing a plan of graduated steps for Middle Eastern nations to increase trade and investment with the United States and others in the world economy. The first step is to work closely with peaceful nations that want to become members of the World Trade Organization (WTO) in order to expedite their accession. As these countries implement domestic reform agendas, institute the rule of law, protect property rights (including intellectual property), and create a foundation for openness and economic growth, the United States would expand and deepen economic ties through Trade and Investment Framework Agreements (TIFAs), Bilateral Investment Treaties (BITs), and comprehensive Free Trade Agreements (FTAs).

• Work with Saudi Arabia, Lebanon, Algeria and Yemen on WTO accession.

• Use the Generalized System of Preferences program, which provides duty-free entry for many products from designated developing countries, to increase trade linkages. Work with countries so they can take advantage of GSP benefits fully.

TIFAs with the Middle East offer an important tool for countries making the transition toward free trade with the United States. TIFAs promote the establishment of legal protections for investors, improvements in intellectual property protection, more transparent and efficient customs procedures, and greater transparency in government and commercial regulations. The President's trade initiative would:

• Explore developing TIFAs with interested countries, and expand the substance of agreements already in existence with Bahrain, Egypt, Tunisia and Algeria.

• Expand private sector participation through business councils that can help TIFA agendas and ensure that action plans meet the practical needs of businesses.

• Offer Qualified Industrial Zone (QIZ) opportunities with Israel to other countries in the region, in addition to Jordan and Egypt, to encourage peaceful regional integration.

• Offer to negotiate Bilateral Investment Treaties with additional countries. A BIT also comprises one chapter of a comprehensive FTA.

The Administration will work with Congress under Trade Promotion Authority to pursue comprehensive free trade agreements with countries that are ready and willing to undertake the in-depth commitment to promote economic reforms, liberalize trade systems and open their economies. These FTAs would provide a framework through which we could subsequently add other interested and qualified countries into an FTA with the United States.

• Complete the U.S. - Morocco FTA by end of 2003. Consider using the Morocco FTA as framework for negotiations with other countries in the region when those countries are ready.

• Negotiate an FTA with Bahrain. An FTA with Bahrain will serve as a starting point for negotiations of future FTAs with other Gulf states when they are interested and ready.

• Consider the use of "cumulation clauses" in FTA agreements, which would allow our FTA partners to produce in concert with their neighbors to meet rules of origin requirements. This measure, along with other region-wide customs and rules of origin arrangements, could help build regional and multilateral trade linkages.

The Administration is committed to providing the critical financial, technical, and capacity building aid to help countries in the Middle East take full advantage of increased trade opportunities with the United States. The president's initiative would:

• Provide assistance for trade capacity building.

• Promote trade-related policies that enhance the business environment, and increase two-way trade with the region.

• Explore establishing one or more regional trade centers to coordinate trade capacity building efforts.