The council of the Arab Economic Union has begun a study to set up a customs union between Egypt, Libya and Iraq.
The council said in a statement it is carrying out the study at the request of the three countries that want to enlarge their economies and fight unemployment.
Harmonization of custom duties between the three nations will not have any adverse impact on their economies, the council said. It added that the move is meant to encourage the flow of investments, attract capital and promote national industries.
The union, which would come into effect next January, is not in conflict with an general Arab project to set up a free trade area. Several countries, including Morocco, Tunisia, Egypt, Jordan and the United Arab Emirates are working to create such an Arab free trade area.
These states already have concluded bilateral agreements as a first step to a larger Arab free trade area.
The project is at risk of remaining bogged down in political differences between the Arab states that have
failed to hold a general conference since 1991, following Iraq’s invasion of Kuwait. The United Nations embargo still imposed on Iraq since its occupation of Kuwait is also a stumbling block to the proposed
customs union.
The objective of a customs union between Egypt, Libya and Iraq would be to consolidate Arab economies, cut production costs, and reinforce Arab negotiating power with other regional groupings and nations, the council said.
It said the study will set a time-table for the unification of custom duties, the standardization of laws and the setting up of joint fund for customs receipts.
The project also provides for setting up a fund to compensate any of the three states whose economy is harmed by the union. The Arab Economic Union Council said it will finalize the project with the three nations by the end of the year. The project requires the unification of import and export customs as well as the standardization of custom and monetary policies. –(Albawaba-MEBG)
