May 31, 2009 / 12:16 PM / 11 years ago

FACTBOX: U.S. tariffs, sanctions abound in Muslim world

(Reuters) - U.S. President Barack Obama travels to Egypt this week to give a major speech to the Muslim world and will make a stop along the way in Saudi Arabia.

U.S. trade ties with many Muslim countries are restricted by tariffs or sanctions, while the United States is deeply dependent on others for imported oil.

HIGH U.S. TARIFFS

* Pakistan, Egypt, Turkey, Bangladesh and many other Muslim countries face average tariffs of up to 15 percent on exports to the United States because many goods they make are those the U.S. tariff system most heavily taxes, such as clothes, bedsheets, towels, shoes, glass, luggage and ceramics.

The overall average U.S. tariff on manufactured goods is about 2 percent. The Progressive Policy Institute estimates the United States collects the same amount of taxes on $3.6 billion of towels and clothes from Pakistan as on $40 billion of medicines, wines, paintings, and airplane parts from France.

OIL DEPENDENCY

* Only one Muslim country, Saudi Arabia, is among the United States’ top 15 trading partners. Saudi Arabia exported $54.8 billion worth of oil and a few other products to the United States last year and imported $12.5 billion of U.S. goods. Obama wants to cut U.S. dependence on foreign oil, which he says weakens U.S. security by sending billions of dollars to “nations with unstable or unfriendly regimes.”

SANCTIONS ON IRAN, SYRIA

* Washington bans most trade with Iran, a Muslim nation of 70.5 million, because of U.S. concerns over Tehran’s support for terrorism, its nuclear program the West says is aimed at building weapons, and its record on human rights. Many in Congress want to tighten sanctions.

Last year, U.S. exports to Iran rose sharply to $683.2 million, most of that from a $535.6 million purchase of U.S. wheat. The United States has allowed imports of pistachios, rugs and certain other products from Iran since 2002. Total U.S. imports from Iran were $102.2 million last year.

The 2003 Syrian accountability act banned nearly all U.S. exports to Syria, except food and medicine. Syria is on the

U.S. list of state sponsors of terrorism.

The United States removed Libya from that list in 2006 after the country agreed to give up weapons of mass destruction. Since then, U.S. imports of mostly oil from Libya have risen to $4.2 billion in 2008. U.S. exports to Libya were $721 million last year.

UAE TOP U.S. MARKET IN MIDEAST

The United Arab Emirates is the United States’ top export market in the Middle East. The United States exported nearly $15.8 billion of goods to the UAE last year, giving it a nearly $14.5 billion trade surplus with the moderate Gulf state.

A proposed free trade pact with the UAE collapsed after Congress reacted in uproar to news state-owned Dubai Ports World had acquired U.S. port facilities. Congress moved to block the ports deal.

Obama recently approved a deal allowing the transfer of civilian nuclear technology to the UAE, although Congress could still vote to block the pact.

U.S. FREE TRADE PACTS IN MIDEAST

The United States’ oldest free trade agreement is with Israel, which took effect in September 1985.

Former President Bill Clinton negotiated a free trade deal with Jordan that went into effect in 2001. Two-way trade totaled $36.8 billion between the United States and Israel last year and $2.1 billion the United States and Jordan.

Former President George W. Bush proposed creating a Middle East Free Trade Area by 2013. His administration negotiated free trade deals with Morocco, Oman and Bahrain and ushered Saudi Arabia into the World Trade Organization.

Bush decided against a free trade deal with Egypt. However, he established “qualified industrial zones” under which Egyptian goods made with Israeli components in certain zones of Egypt enter the U.S. duty free.

Two-way trade with Egypt, a nation of more than 80 million, was about $8.3 billion in 2008 with a $3.7 billion surplus in favor of the United States.

PAKISTAN, AFGHANISTAN

* The United States has rebuffed Pakistan’s interest in a free trade agreement, but after the 2005 earthquake pledged to create “reconstruction opportunity zones” that would allow goods made in frontier regions of Pakistan and Afghanistan to receive duty-free treatment. That remains unfulfilled.

The United States imported $3.6 billion worth of goods from Pakistan and just $84.7 million from Afghanistan last year.

NON-ARAB MUSLIM COUNTRIES

* Some of the most robust U.S. trade relationships in the Muslim world are with non-Arab states. Two-way trade in 2008 with Malaysia was about $44 billion, with Indonesia about $22 billion and with Turkey about $15 billion.

Reporting by Doug Palmer; Editing by Vicki Allen

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