The EU signed trade deals with some countries in the region and in North Africa. The "Barcelona Process", launched in 1995, is supposed to culminate by 2010 in a free trade zone incorporating the EU, Algeria, Morocco, Tunisia, Egypt, Israel, Jordan, Lebanon, the Palestinian Authority, Syria and Turkey. Libya has an observer status and Cyprus and Malta have joined the EU in the meantime. According to the International Trade Monitor, published by the Theodore Goddard law firm, the “Agadir Agreement”, the first intra-Mediterranean free trade compact, was concluded between Egypt, Jordan, Morocco and Tunisia with the EU. The EU signed a Cooperation Agreement with Yemen and, in 1989, with the Gulf Cooperation Council, comprising Saudi Arabia, Kuwait, Bahrain, Qatar, UAE and Oman. A more comprehensive free trade agreement covering goods, services, government procurement and intellectual property rights is in the works. The GCC has recently established a customs union as well. A similar set of treaties may soon be inked with Iran with which the EU has a balanced trade position at $7 billion worth of imports versus a little less in exports.
EU's annual imports from Iraq (at about $4 billion in 2001) doubled after Iraq's invasion of Kuwait in 1990. Prior to the latest intervention, the EU purchased over 25% of Iraq's exports and exported almost $2 billion worth of goods to Iraq, far less than it did in the 80s, but still a considerable value at 20% of Saddam’s imports. EU aid to Iraq since 1991 exceded $300 million. But Europe's emphasis on trade and regional integration as foreign policy instruments in the Mediterranean is largely impracticable. America's cash is far more effective. Charlene Barshefsky, the former US trade representative from 1997 to 2001, explained why in an opinion piece in the New York Times:
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"The Middle East ... has more trade barriers than any other part of the world. Muslim countries in the region trade less with one another than do African countries, and much less than do Asian, Latin American or European countries. This reflects both high trade barriers ... and the deep isolation Iran, Iraq and Libya have brought on themselves through violence and support for terrorist groups ... 8 of (the region's) 11 largest economies remain outside the WTO."
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So the economic 'tool' is poorly suited to guide conduct in the region, Middle Eastern economies are relatively insignificant, focused on a single primary sector export with little other than extractive industries, insignificant commerce, negligible markets, no innovation, low technology, generalized poverty and a very inequitable domestic distribution of income. In an environment like this, the oil exporters (like Iraq) are fairly immune, and we saw the palace construction continue throughout the embargo. In the rest of the countries governments are responsive only to the degree they perceive of a need to improve the situation for their subjects (not something autocratic regimes are particularly sensitive about).