The League of Arab States and the International Islamic Trade Finance Corporation (ITFC) have agreed to work together towards accelerating the growth of intra-Arab trade.
The Arab League is a regional organisation of Arab states in and around North Africa and the Middle East. The ITFC, the Islamic Development Bank Group’s trade finance arm, meanwhile, helps entities in the same region gain better access to trade finance.
Under a memorandum of understanding, the two have committed to “jointly co-ordinate the design, financing and implementation of technical assistance and capacity building programmes”, the parties say in a statement.
According to Kamal Hassan Ali, assistant secretary-general for economic affairs at the Arab League, the MoU will “establish a legal basis” for this co-operation.
The objective is to enhance trade capacities and improve structures and mechanisms of trade co-operation among Arab countries.
The MoU earmarks the roll-out of Arab Africa Trade Bridges and the second phase of the Aid for Trade Initiative for Arab States (AfTIAS) as programmes the Arab League and the ITFC will collaborate on. The parties will also host regional training courses, conferences and workshops on trade development to support the Greater Arab Free Trade Area, a pan-Arab free trade zone.
Commenting on the signing of the MoU, Ali says: “It will open up new prospects of collaboration which will certainly be reflected on the completion of the requirements of the Greater Arab Free Trade Area and therefore the Arab Customs Union.”
Since 2008, the ITFC has provided more than US$40bn of trade financing to Islamic Co-operation Organisation member countries. Most recently, it committed to implementing US$3bn-worth of framework agreements in Egypt to finance the importation of commodities such as petroleum, petroleum products, gas, wheat, foodstuff and other goods.