Towards a Middle East Common Market?

Abdel-Azim Hammad, Tuesday 19 Jul 2022

Various parties in Israel have been speculating about the prospect of a Middle East Common Market bringing together Israel and five Arab states.

Towards a Middle East Common Market
Biden and Herzog (photos: AFP)


To start the story right, acting Israeli Prime Minister Yair Lapid was being groomed to become the country’s second Yitzhak Rabin.

With his political allies, he would end the hegemony of the ultra-nationalist religious right led by Likud Party leader Benjamin Netanyahu and shift the Israeli approach to the Palestinian question and the rest of the Arab world away from that camp’s outlook and towards a pragmatism based on security and economic criteria.

Religious Zionism calls for the establishment of a “Greater Israel” from “the river to the sea.” As Menachem Begin, Netanyahu’s predecessor as leader of Israel’s right-wing religious alliance, put it, how can the Jews claim a right to Tel Aviv and not to Judea and Samara, the land of the Torah and its prophets and kings?

An opinion of this sort translates into the refusal to concede an inch of territory in the West Bank (Judea and Samara), opposition to the two-state solution and the establishment of an independent Palestinian state living side-by-side with Israel, and the mass population transfer of Palestinians from the West Bank to Jordan.

According to Begin, Netanyahu, and the rest of the Likud and ultra-nationalist religious parties in Israel, Jordan is the national homeland of the Palestinians. That is how they interpret the Balfour Declaration made by the British government in 1917.

Earlier this month, news came out of Israel concerning the prospect of a Middle Eastern Common Market and even an “Arab NATO,” ideas that had been previously promoted by Shimon Peres, foreign minister under Rabin, whose mantle Lapid is set to inherit if he and his allies obtain a majority in Israel’s parliamentary elections in November.

One of the architects of these ideas appears to be Avigdor Lieberman, now serving as Israel’s finance minister under Lapid. Although Lieberman and the Yisrael Beiteinu (Israel is Our Home) Party he heads fall on the far right of the Israeli political spectrum, he broke with the Netanyahu alliance because of his secularist outlook.

Shortly before US President Joe Biden visited Israel this month, Lieberman said, in support of the Lapid-as-Rabin scenario, that he hoped that Biden’s visit would lead to a Middle East Common Market that would include Saudi Arabia.

“It is time to create a new Common Market in the Middle East,” the member states of which, namely Israel, Saudi Arabia, the UAE, Bahrain, Jordan and Egypt, would be connected by “a kind of trans-Middle Eastern highway,” he said, as quoted by Reuters.

“That’s a big challenge... It will change the reality here from end to end in both the fields of security and of economics.”

On the same day, Israeli journalist Seth J Frantzman in the headline to an article in the Jerusalem Post asked “does Iran take Israel-Gulf air defence cooperation seriously?” He said that it was one thing for countries to share information or even agree defence deals, but that it was an entirely different thing to build a fully-fledged military-political alliance against Iran.

Since a pact of this sort is unlikely in the foreseeable future, Frantzman said, Israel should pursue other priorities during Biden’s visit. Even so, official remarks in favour of such a scheme continued to be aired during it.

For many observers, two questions suggest themselves. First, why has the notion of a regional Common Market become a priority for the non-Likud bloc in Israel? Second, why is the implementation of this contingent on Lapid and his alliance’s victory in the forthcoming elections?

Should the wager on Lapid succeed, it would mean a fresh attempt to revive the spirit of the 1991 Madrid Conference between Israel and the Palestinians, at least with regard to the Palestinian question.

It would also see the Oslo Process through to its anticipated conclusion on the basis of the two-state solution and would include strict security guarantees for Israel and the annexation of major settlement areas in the West Bank in the framework of a land-swap deal with the Palestinians.

It would halt Israel’s slide into systemic racism and lay the groundwork for reviving the Middle East Common Market project, to which the Israeli left and centre and many US Jews attach more importance than to the so-called Arab NATO. At all events, it would render an Arab NATO deeper and more comprehensive than a mere defence pact.

On the second question, the religious/nationalist camp in Israel is driven ideologically by a vision of a “Greater Israel” that implies the deportation of the country’s Arab inhabitants so that Israel does not become a dual-national or officially apartheid state.

Such a prospect would put the Arab governments in an awkward position vis-à-vis their own citizens and could jeopardise the stability, if not the survival, of some Arab states. It would also ignite further Palestinian uprisings.

Such developments would make it impossible for any normalisation with Israel to continue, let alone any thought of a Common Market, talk of which has effectively ceased since Rabin’s assassination in 1995 and the rise of Netanyahu and the Likud.

On the other hand, were the Likud to fall further and Lapid to obtain a large enough majority to form a stable government that eschews the “Greater Israel” ideology and opts for a more pragmatic approach based on concrete security and economic interests, it would be easy to revive the Common Market.

A prerequisite would be to settle the conflict with the Palestinians in the framework of the two-state solution, according to Israel’s stated conditions. At that point, it would be possible to forge a Jordanian-Palestinian confederation, which would then join the proposed Common Market. The Arabs would no longer have grounds that Washington could accept not to come aboard the market as well.

One explanation of why non-Likudists in Israel attach such importance to this project is the present narrowness of the Israeli market despite its high-tech capacities, successful economic management, and ability to attract investment from abroad, especially from Jewish businessmen and financiers in the US and elsewhere.

With access to a broader market, Israel could easily diversify its economy, presently heavily dependent on the production of advanced military and civil technologies, into other heavy industries, such as aviation, shipping, railways, automobiles, and heavy machine manufactures.

This broader market would become available through a Common Market comprised of the countries Lieberman has mentioned, and it could eventually expand to other countries in North Africa and the Levant.

The economic benefits to Israel would be immediate, and there would also be the political benefits to which Lieberman alluded when he said that the market would “change the reality here from end to end in both the fields of security and of economics.”

Any common market system offers the citizens of member states the freedom to move between, reside and own property in, work in and transfer money between member states. It would thus be normal for any number of Palestinians to move to, live and work in, and own property in any member state.

Such movement would not be considered deportation or transfer. Moreover, as the conditions for Palestinians who remained in the Palestinian portion of the confederation with Jordan improved, and with Israel’s annexation of major settlements, Israel’s security would be achieved and the “demographic bomb” that threatens the Jewish character of the Israeli state would be eliminated.

Because of its technological, administrative, and political (democratic) superiority, Israel would become the engine of the Common Market, much as the German-French partnership became the engine of the European Common Market and then the European Community and European Union.

This scenario is not unthinkable, unless something occurs that proves once again that the Middle East is too tumultuous and volatile a region to predict when and where obstacles might emerge – in the form of Saudi or Egyptian objections, for example – or when disasters like assassinations, coups, or uprisings might occur.

*A version of this article appears in print in the 21 July, 2022 edition of Al-Ahram Weekly.

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