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Douglas Bell stated that economic policy and trade agreements between the US and Libya are at an important juncture. As a general free trade initiative and policy infrastructure currently are being created to reflect the new reality of an economic relationship between both countries, policymakers must remain attentive to Libyan economic ambitions and formulate policies that are in line with the country's vision for the future.

Bell suggested that a number of tools should be utilized in order to induce a prosperous free trade area in the region within the next ten years. First, the World Trade Organization (WTO) should engage Libya in multilateral track negotiations and establish a rules-based trading and investment regime. Libya, along with Lebanon and Iraq, is one of the few countries in the Arab world that does not belong to the WTO and is consequently economically circumvented. Membership in the WTO will place Libya on a progressive track that will institute the rule of law, address market access issues, and will modernize energy services and telecommunications.

A second step is a bilateral trade and investment framework agreement between the American and Libyan governments. While such agreements with Morocco, Jordan, and Israel have set a good standard, agreements with Libya have lagged over the past four years due to the slow pace of reform. Once the US has a better understanding of what Libya wants and is able to achieve, a formal regulatory agreement may be adopted and implemented.

Libya's participation in a general assistance program for low-income countries is another method of promoting free trade. US commercial and foreign policy interests must be identified and incorporated into the final framework, which should deepen the economic relationship between countries, but also promote reform, a global economy, inter-country trade, and integration.

Libya currently maintains observer status at the WTO and has conveyed interest in joining the organization. Bell affirmed that the country is rich in resources and has a well-established history of promoting reform. Bilateral economic dialogue between Libya and the US inevitably will be followed by political dialogue, creating opportunities for personal interactions between citizens of the two countries and ultimately leading to a deeper cultural understanding. The challenge will be determining Libya's desired pace of development toward stable and sustainable reform. Although high expectations and excitement over future economic prospects are mitigated by the challenges of real economic transformation, Bell was hopeful and optimistic that at this time next year a great deal of progress will have been made.

Matthew S. Borman addressed the practical implications of a free trade agreement with Libya, and discussed the adaptation and application of existing US trade models in the country. The majority of hardware and software exports is commercial and has minimal restrictions, though items with military capabilities and dual uses must adhere to unilateral export controls. Up until 2004, all products exported to Libya required approval, and most approval requests were rejected. Libya's renunciation of weapons of mass destruction in 2003 enabled the US to lift the embargo on Libya. A US petition submitted to Congress requesting the removal of Libya from the terrorist designation list will go into effect in the coming weeks. In addition, the responsibility of overseeing exports to Libya was returned to the Export Administration, which translates into lower levels of restrictions for the exportation of goods.

From a commercial perspective, three new regulatory agreements have defined the implications of lifting the embargo between the US and Libya. According to the April 2004 agreement, items can be exported to Libya without prior government approval. The annual dollar value of US commercial exports such as food, medicine, textile, automobiles, and industrial machines has increased significantly since the removal of sanctions. The March 2005 agreement improved upon the previous one by easing the licensing policy and further increasing exporting capabilities from the US to Libya. Moreover, this agreement specified to US exporters how to cope with an install base including items such as computers, which may already be in Libya from past licensing activities, or items illegally exported into the country. Although these items should be reported before being modified, they may then be refurbished or upgraded with exported parts from the US.

The third agreement in November 2005 identified a group of items that would receive a licensing exception as long as they are used by US persons conducting business or professional activities in Libya. Accordingly, items such as office supplies may receive a license exception, and then be easily exported from the US. As a result of all three agreements, over $83 million worth of products are exported to Libya each year. The dollar value of all products requiring a license is valued at $1.2 billion. Borman recommended that US businesses consider getting a license if they anticipate a business opportunity with Libya, as the process for a two-year license takes thirty days to complete.