Sep 16, 2019
This report describes how a comprehensive free trade agreement among the economies of the Levant could increase the average gross domestic product by 3–7 percent, and reduce regional unemployment rates by 8–18 percent. An accompanying RAND-developed online tool allows users to examine how and why integration yields this large economic dividend and explore the assumptions underlying these findings.
Economic integration in the Levant — in the form of a comprehensive free trade agreement (FTA) that eliminates tariffs, lowers investment and nontariff barriers, and waives visa requirements — could increase the average gross domestic product of the Levant nations by 3–7 percent. This economic expansion would likely create at least 0.7 million to 1.7 million additional new jobs, reducing regional unemployment rates by 8–18 percent — and total job creation might be substantially larger. These estimates are for a potential FTA among Egypt, Iraq, Jordan, Lebanon, Syria, and Turkey — six of the core Levant countries.
The authors have also developed an online tool that allows policymakers and the public to examine the economic dividend from economic integration. It allows users to (1) vary key assumptions about the movement of goods, people, and capital and (2) explore different combinations of countries participating in the FTA — even allowing the inclusion of Israel and the West Bank and Gaza, the latter two of which are referred to as Palestine. The benefits increase for larger blocs of countries and with reduced restrictions on the movement of goods, people, and capital among these countries. The authors recognize that regional integration might start with only a subset of countries and with only partial economic integration: The tool also allows examination of the benefits of these alternative arrangements.