The Establishment of the Pan Arab Free Trade Area :
The Agreement On Facilitation And Development of Trade Among Arab States was signed by the members of the Arab league on the February 27, 1981.
To enhance the implementation of this Agreement the member states agreed on February 19, 1997 on the arrangements to establish the Pan Arab Free Trade Area to be completed within 10 years.
The Arab Summit held in Beirut in march 2002 and the Economic And Social Council meeting held in September 2002 decided to reduce the transitional period for the implementation of the Pan Arab Free Trade Area (PAFTA) to be seven years ending in January 2005.

• Member States of the (PAFTA):
  Egypt – United Arab Emirates (UAE) – Bahrain – Jordon – Tunisia –Saudi Arabia– Sudan – Syria – Iraq – Oman – Palestine – Qatar – Kuwait – Lebanon – Libya – Morocco – Yemen .

• Non Member states :
  Members of the Arab League who have not yet finalized the procedures to join the area.
  Algeria – Djibouti – Somalia – Comoros Islands – Mauritania .

• Establishment of Free Trade Area (FTA) :
  • Elimination of customs duties and other fees and duties having similar effects was implemented as follows:
    10% annual reduction on first of January of each year from 1998 to 2003 and by 20% for the years 2004 and 2005.
  • Elimination of Non Tariff Barriers (NTB’s)
    Member States should eliminate all non tariff barriers, including Administrative, Monetary, Financial and Technical barriers.

• Preferential treatment for the least developed member states:
  The Arab Summit decided to grant the least developed member states a preferential treatment, through which their exports to the other member states should enjoy free access and exemption and custom duties, meanwhile they have to reduce their customs tariffs gradually in five installments starting from January 1,2005.

• Rules of Origin :
  The rules of origin applicable at the moment requires that the value added should not be less than 40% of ex- factory cost . Detailed rules of origin have been under discussion among member states for some time , when agreed upon , it will replace the previous one.

• Trade in Services :
  Agreement have been reached on the general Provisions of the Agreement. Negotiations shall start soon between member states to agree on the specific commitments of each member.