September 27, 2000. Copyright 2000. Graphic News. All rights reserved.

FREE-TRADE ZONE COULD FOLLOW MIDEAST PEACE

LONDON, September 27, Graphic News: THE European Union is planning an ambitious scheme to ensure that any Israel-Palestinian peace deal to end 52 years of conflict is accompanied by massive economic growth and renewed European political influence in the Middle East.

Under the plan -- based on the five-year-old ÒBarcelona processÓ -- the private sector will be encouraged to invest in developing the infrastructure of the new Palestinian state; and Mediterranean states, including rivals Israel and Syria, will work with the EU to create a 27-nation free trade zone by 2010.

The scheme sees the EU continuing its $110 million a year aid programme to Yasser ArafatÕs Palestinian National Authority (PNA) and $85 million a year towards reconstruction in Lebanon. 

After 22 years of occupation, IsraelÕs withdrawal from the south Lebanon Òsecurity zoneÓ in May left a ravaged infrastructure of schools, hospitals, civic buildings and transport links littered with landmines.

LebanonÕs Economy and Commerce Minister Nasser Saidi has appealed to the EU for emergency aid estimated at up to $6 billion over the next five years.

The Jeddah-based Islamic Development Bank (IDB) has agreed to lend Lebanon $100 million, Kuwait has pledged a $15 million aid package and the Lebanese government has approved a five-year plan totalling $1.2 billion.

Syria will face short-term reconstruction costs of $1 billion to rebuild towns destroyed by the Israelis during their 1967 occupation of the Golan Heights. This is expected to be funded by other wealthy nations including the United States, Japan, the Gulf States and possibly Canada and Norway.

As part of the scheme Syrian President Bashar al-Assad is expected to sign an association treaty to expand and develop ties between Damascus and each of the EU states. This will help raise standards of living, especially for low-income workers whose average monthly earnings are around $100, and help create some 200,000 jobs per year for those entering the labour market.

The architects of the EUÕs Mideast plan -- British politician Chris Patten; Javier Solana, former secretary-general of NATO; and Miguel Moratinos, the EUÕs special envoy to the Middle East -- will face three major problems.

Palestinian refugees who lost their land and property in 1948 and 1967 want ÒcompensationÓ from Israel for resettlement in the West Bank and Gaza Strip. The EU may have to contribute to the multi-million dollar bill, estimated at between $1.85 billion and $35 billion.

Israel may ask the EU to stump up towards the $100 million cost of building desalination plants as part of IsraelÕs recompense for removing settlers from around the resource-rich Sea of Galilee. 

Finally the EU must stop protecting its own farmers in order to allow the entry of agricultural produce within the new free-trade zone -- possibly the hardest part of the scheme to swallow by the EUÕs 7.5 million farmers.
/ENDS
Sources: European Community External Cooperation Programmes, JaneÕs Foreign Report, Reuters

NOTE: The Barcelona Declaration embraces the 15 EU members plus Algeria, Egypt, Jordan, Lebanon, Morocco, the Palestinian Authority, Syria, Tunisia, Turkey, Cyprus, Malta and Israel.