Prosperity, peace and the Palestinians
Business professor dreams of a Middle East trade agreement
Archived article from Oct 8, 1999
By Dave Muha
When you walk into Professor Jerry Rosenberg's office on the Newark campus, you immediately notice the personal collection of photographs of world leaders on the credenza behind him -- Chairman Yasir Arafat, the late King Hussein of Jordan, former Prime Minister Benjamin Netanyahu. One -- a picture of the professor with former Israeli Prime Minister Shimon Peres -- is even autographed. The inscription reads: "With much respect for his attempt to organize a great dream."
That dream is the focus of Rosenberg's new book, "Arafat's Palestinian State and JIPTA: The Best Hope for Lasting Peace in the Middle East" (JAI Press). JIPTA, which stands for Jordanian-Israeli-Palestinian Trade Agreement, is his concept for an accord that would join the people of this religiously and ethnically diverse region in the common pursuit of a higher living standard and a more stable Middle East and North Africa.
A professor of international business at the Faculty of Management, Rosenberg has spent two decades developing this economic framework for regional integration.
Indeed, his interest in this topic can be traced back more than 40 years to 1958, when he was studying in Paris on Fulbright and French government scholarships.
"A friend said 'Jerry, we're going to hear Monnet speak tonight. Would you like to come?'" Rosenberg recalls. "I thought he was talking about the painter so I said, 'yes.'" His friend was actually referring to Jean Monnet, the creator and first administrator of the European Coal and Steel Community (ECSC), the forerunner of the present 15-nation European Union.
"After World War II there was talk about carving up Germany so it would no longer exist as a separate country," he explains. "Some felt this would be the best way to prevent it from starting another war. But the idea was not acceptable to the United States, so instead the Allies had to focus on bringing Germany and France together in a meaningful way."
Monnet's idea, which was eventually adopted, was predicated on a form of economic integration. He proposed taking advantage of France's abundant supply of coal and Germany's wealth of iron ore -- the two ingredients necessary for the production of steel. That commodity was in demand in Europe and was otherwise available only as a costly import. The ECSC, which was headquartered near the border of the two countries, became the model for cooperation.
As its success benefited the economies of both countries, others looked for a way to participate. Italy, which also was suffering from a war-ravaged economy, was the next to join. Monnet and others soon realized there was more to be gained by increasing cooperation. They looked to Belgium, Luxembourg and the Netherlands, which had already formed a customs union. There were no passport controls; tariffs and quotas were low; and citizens were free to bank in one another's country.
"Eventually, the rest of Western Europe saw how countries could work together to improve their living standard in a way that they couldn't in isolation," says Rosenberg.
This ECSC model, he maintains, could serve as a model for peace and prosperity in the Middle East as well. "Israel and the Palestinians each have something that the other needs," he observes. "Israel's economy is becoming more oriented toward high-tech industries. It needs access to a skilled labor force that can be found in the Palestinian people."
Conversely, he notes that Yasir Arafat will survive as leader of the Palestinians only if he provides a better life for his citizens. The per capita annual income of a worker in Gaza is $1,000; it is $17,000 in Israel.
Rosenberg's JIPTA model would allow goods, workers and capital to cross borders in much the same way that the North American Free Trade Agreement (NAFTA) allows that to happen between the United States and Mexico.
"With NAFTA, you saw the establishment of a free trade zone at the U.S.-Mexico border," he points out. "American companies were able to build manufacturing operations there to take advantage of the cheaper labor. The cost savings allowed some companies to stay in business. And, of course, Mexico benefits with new employment opportunities, higher living standards, increased exports of other products and greater foreign investment."
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