UN Economic and Social Commission for Western Asia Warns of Potential Impact of US Tariffs on Arab Exports
The United Nations Economic and Social Commission for Western Asia (ESCWA) has recently issued a warning about the potential effects of the new US tariffs on Arab exports, valued at $22 billion.
Middle-Income Countries to Face Increased Financial Burden
According to ESCWA, middle-income countries such as Tunisia, Egypt, Morocco, and Jordan will have to bear increased financial costs. This is due to the rise in sovereign bond yields, reflecting global financial instability exacerbated by US tariff policies.
Additional Interest Payments and Budget Constraints
The institution estimates that these countries will have to pay an additional $114 million in interest by 2025, which could affect their social budgets and development investments.
Global Demand Slowdown and Economic Destabilization
The note also anticipates a slowdown in global demand, particularly from major trading partners such as China and the European Union. It highlights that 72% of Tunisia's exports and 68% of Morocco's exports are destined for the EU, exposing the region to increased economic destabilization risks.
Recommendations for Economic Integration and Diversification
To address these challenges, ESCWA recommends accelerating regional economic integration by implementing the Arab Free Trade Area, launching the Gulf Customs Union, and activating the Agadir Agreement to stimulate intra-Arab trade.
New Negotiations with the US and Repositioning in Global Value Chains
The Commission also proposes opening new negotiations with the US to secure more favorable trade conditions. Additionally, it emphasizes the need for Arab countries to reposition themselves in global value chains by investing in logistics infrastructure, improving regulatory frameworks, and enhancing labor market flexibility. These efforts aim to attract new investments, boost trade, and strengthen the resilience of regional economies.
A Crucial Economic Crossroads for the Arab Region
"The Arab region is at a critical economic crossroads. Despite the immediate challenges posed by these tariffs, they offer an unprecedented opportunity to build more resilient, diversified, and integrated economies across the Arab world," said Rola Dashti, Executive Secretary of ESCWA.
