Economists say that the Agreement on Multimodal Transport of Goods Among Arab Countries, which was recently signed by the United Arab Emirates, will enhance regional trade efficiency and improve transportation throughout the Arab world.
The UAE became the eighth Arab signatory on May 31st when officials signed the regional trade agreement at Arab League headquarters in Cairo, joining Saudi Arabia, Syria, Jordan, Tunisia, Iraq, the Palestinian Authority, and Yemen.
Mohammed bin Nakhira al-Zahiri, the UAE Ambassador and permanent delegate to the Arab League, told reporters that the signing of the agreement was "part of the achievements of the Arab League at the economic level, in addition to its contribution to facilitating transport among the Arab countries, and in increasing the volume of bilateral trade and achieving economic integration."
Hazim Ali, a financial and political analyst at Al-Arabiya Channel in Dubai, said, "The agreement will allow for the resolution of transport problems between Arab countries in several areas, including the cost of transportation and the quality of transport services, as well as procedural problems and constraints encountered at entry points."
Ali said UAE membership would help "the signatories to the agreement take advantage of the UAE's experience in the development of its air and sea ports, considering that it is a regional hub for maritime, air and land transport".
He added that signing the agreement "will reflect positively on the transport sector in the region, particularly road transport because about eighty percent of bilateral trade between Arab countries is transported by land, while about ninety percent of the volume of world trade moves by sea."
The multimodal [container] system has been the primary method for the flow of goods from producer to consumer in the Arab world since the 1950s as it offers many facets necessary for efficient and cost-effective production, distribution and storage.
Analysts predicted that the UAE's inclusion would lead to greater efficiency and would also contribute to increased regional and international trade, thereby improving the economic competitiveness of countries in the region.
Economist Ruba Abdul Hamid said development of multimodal transport is reflective of continued economic progress.
She added, "The improvement in the balance of payments, through increased exports, relies on the efficiency of transport services in terms of their impact on the cost of exports, export prices, and the cost of access to imports."
According to statistics from the Council of Arab Economic Unity, bilateral trade volume among Arab states reached $70 billion in 2010 while Arab exports to world markets reached $1 trillion, most of which were oil exports. Arab imports were valued at $1 trillion.
Diaa Abdel Aal, an economist, told Al-Shorfa, "The Arabic network for integrated multimodal transport, especially shipping, holds great importance for the Arab states, most of which border the coastal shores of seas and oceans."
He added, "Maritime transport secures some 95% of the volume of trade exchange between Arab countries and other countries, so the strategic location of the Arab states requires them to work to create principal ports that use advanced technology to improve the performance of Arab maritime transport and ports, and advance foreign trade of Arab countries with the countries of the world."