2 to quantify the effects of the Uruguay Round on ME countries' exports, and also to determine how their trade might be affected by regional arrangements in Europe and North America. The magnitude and composition of intra-trade within the middle East region is analyzed, and an attempt is made to generate information relating to future prospects. To provide an introduction, trends in the level, composition and direction of ME exports are analyzed. Measures such as the "revealed" comparative advantage, trade intensity, and export similarity indices are employed to help assess ME export opportunities (and constraints) both within and outside the region.

# II. Trends in the Level and Composition of Regional Exports

Any assessiment of the importance of external developments would be facilitated by identifying the. current major markets for Middle East exports since this is where the analysis should initially focus. Table 1 provides relevant information by showing the direction (value) and share of ME exports to different destinations, i.e., all OECD countries, OECD countries in Europe, North America and several other regional countly groups (Box 1 provides more detailed infoTmation on the direction of Egypt's exports). These figures clearly show the current importance of OECD markets for all Middle East exports, yet, three different trade patterns exist. Fi.rst coutrr-Kes like C:yprus, Iran, Libya, Syria and Turkey are primarily dependent on OECD European markets and they may be negatively affected by integration efforts like the extension of the EU. On the other hand, Oman, Qatar, Saudi Arabia and the UAE have a larger share of exports destined for North America and Japan so these countries seemingly would be more concerned with the effects of NAFTA on their trade. Third, several ME countries rely on non-OECD markets. Over 60 percent of Bahrain, Jordan, Lebanon, and Oman's exports go to developing countries, most of which are in the region or in Asia.<sup>3</sup> Table 1 compares the direction of ME countries' exports with that for all developing countries combined (see the memo item). Overall, little difference is observed between the two groups' trade shares (64 percent of ME exports go to OECD markets as opposed to 63 percent for all developing countries combined). The Middle East does, however, have a greater dependance on OECD Europe and Japan (49.7 versus 31.5 percent) while the share of exports going to OECD North America is 16 points below average. For the region as a whole these data accent the potential importance of changes in European market access conditions.

Table 2 provides information on the product composition of each Middle East country's exports as well as that for the region as a whole. Mineral fuels are by far the largest product group accounting for approximately 68 percent of all regional exports. This is more than two and one half times higher than energy products' share for in the exports of all developing countries combined (see the memo item). The value of fuel exports ($82.3 billion) is about $53 3About 60 percent of Oman's 1991 exports went to three regional markets, namely, Iran, Saudi Arabia and the UAE. One-fifth of Jordan's exports went to India, while China accounted for an additional _5_ percent. Bahrain's official trade statistics did not specify the destination of roughly 40 percent of its total exports, but these shipments do not appear to have gone to OECD countries. Official trade data for Lebanon are not available and UNCTAD estimates (upon which Table I is based) do not specify individual markets for Lebanon's exports.