BUS613: Advanced International Business

Regional integration and global economic integration should move hand-in-hand. There are tremendous opportunities to strengthen the linkages between MENA countries and wider and deeper global markets, including through vertical integration in global production chains. 

While good progress has been made overall, with wide country variations, there remains substantial scope for further regional and global economic integration. To strengthen trade in goods, MENA countries could continue to unilaterally reduce their MFN tariffs, with an emphasis on reducing tariff peaks to the level of the most competitive regions of the world (for example, East Asia). Efforts could also be made to steadily roll back nontariff barriers to trade, which would involve reviewing existing nontariff measures, reducing their scope, and phasing out those that are not deemed essential for national security purposes. 

Reforms to strengthen trade in services will be required and would include easing entry and licensing restrictions for domestic and foreign firms in services, promoting competition, harmonizing and strengthening regulatory practices, and lowering restrictions on the mobility of foreign workers in the region. Continued public ownership in services is a potential hurdle to increased regional cooperation, given the caution of the countries of the region on privatization. Addressing these issues would directly impact employment, the overriding challenge in MENA as services are labor-intensive and thus critical for more jobs. 

Reducing the cost of trading across borders will mean increasing the efficiency of border-crossings, including the harmonization of custom procedures. Logistics systems need to be vastly improved by abolishing policies reserving logistics activities for specific categories of domestic firms. Transport networks will need strengthening to improve the efficiency of ports and make better use of regional railways. In the power sector, institutional prerequisites for cross-border power trade will have to be established along with strategic investments in regional distribution and transmission. Opening up backbone telecommunication infrastructure to competition and encouraging inward investment in broadband services will bring telecommunications costs down and make Internet services more readily available.