At the crossroads of Africa, Asia, and Europe, the Arab region has participated in some of the oldest trade routes in human history including Silk Road commerce linking Asia and Europe.
 

The share of the Arab region in the world trade amounts to 4.7 percent.[1] When excluding oil, the Arab region’s non-oil exports make up 2% of world exports.[2] Trade openness to the global economy –measured by the ratio of total trade to GDP— amounts to 87 percent in the Arab region, compared to 58 percent for OECD members and East Asia and Pacific, 46 percent in Latin America and Caribbean and 42 percent in South Asia. The most open economy in the Arab region is the United Arab Emirates with a trade to GDP ratio of 162, while Sudan is the least open economy, with trade amounting to only 23 percent of GDP.[3] The region’s main trade partners are the EU, US, and Asia. 

 

Due to the recovery in the oil prices, after an unremitting decline since 2013, the Arab region’s exports increased by 17 percent in 2018, and the trade balance picked up in 2017 after a deficit of 302 million USD in 2016 (the equivalent of 0.04% of total imports), to reach 251 billion USD in 2018 (the equivalent of 30% of total imports).[4]

 

The oil exporting countries’ external trade amount to the major share of the Arab region's external trade, their exports reaching around 88 percent of total exports of Arab countries, while their imports account for 71 percent of the region's imports.[1]

 

Nonetheless, compared to other regions, the Arab region is less globally and regionally integrated in terms of trade. Early pan-Arab regional integration initiatives date back to the 1950s, but it is only since the 1980s that Arab countries started to adopt outward-oriented trade policies. Currently, all Arab states are members of the Pan Arab Free Trade Agreement (PAFTA) with the exception of Mauritania and Somalia which are candidate countries; four Arab countries signed the Agadir agreement, six are members of the Gulf Cooperation Council (GCC) and five are members of the Arab Maghreb Union (AMU).


Latest available data show that intraregional exports for Arab countries amount to 16 percent of the region’s total exports up from 11 percent in 2010; while intraregional imports to the region’s total imports remain at 15 percent for the two years.[4]
The region’s dependence on the region’s diversified economic sectors is increasing. On the one hand, intraregional non-oil exports for Arab countries increased by 33 percent in 2017, twofold the increase of the region’s total exports; and on the other hand, the share of intraregional exports to the Arab region’s total non-oil exports is also increasing, amounting to 25 percent in 2017.[1]

Sudan has the highest share of its intraregional exports to total non-oil exports amounting to 74 percent, compared to an average of 29 percent for the GCC countries. North African countries were the least integrated in the region with Mauritania trading less than one percent of its exports with the region.[1]



This overview has been drafted by the ADP team based on most available data as of August 2019.


Sources:
[1] World Trade Organization. 2019. [ONLINE] Available at: https://www.wto.org/ [Accessed 12 August 2019].

[2] United Nations Conference on Trade and Trade and Development (UNCTAD). 2019. UNCTAD STAT database. [ONLINE] Available at: https://unctadstat.unctad.org/wds/ReportFolders/reportFolders.aspx?sCS_ChosenLang=en [Accessed 12 August 2019]. 

[3] The World Bank. 2019. World Development Indicators. [ONLINE] Available at: https://databank.worldbank.org/source/world-development-indicators [Accessed 12 August 2019].

[4] United Nations Economic and Social Commission for Western Asia (ESCWA). 2018. External Trade Bulletin of the Arab Region, No 26. [ONLINE] Available at: https://www.unescwa.org/publications/external-trade-bulletin-arab-region-issue26 [Accessed 12 August 2019].



Trade Statistical Snapshot 2018
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Data Highlights

  • The Arab region is outstandingly rich in oil and gas and the relatively low level of economic diversification leads to a persistent dependence on these commodities for growth. Fuel exports, representing the vast majority of exports in the oil producing countries, amounted to 82% of the region’s merchandise.

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