Lebanon - Market OverviewLebanon - Market Overview
Lebanon was the 72nd largest market for U.S. exports in 2016, according to U.S. Department of Commerce statistics. The Lebanese Customs Authority reported that Lebanon’s total imports in 2016 reached USD 18.705 billion, of which USD 1.184 billion came from the United States.
In 2016, the United States ranked as Lebanon’s third largest trading partner behind China and Italy. According to Lebanese Customs statistics, major U.S. exports to Lebanon were vehicles (USD 326 million), mineral fuel and oil (USD 237 million), products of chemical industries (USD 193 million), machinery and electrical instruments (USD 118 million), prepared foodstuffs, beverages and tobacco (USD 68 million), and vegetable products (USD 47 million).
Lebanon’s Central Bank Governor estimated GDP growth at two percent in 2016. Quoting the World Bank and the International Monetary Fund (IMF), he forecasts growth to reach two to three percent in 2017. Inflation was negative in 2016 and the IMF forecasts it to reach two percent in 2017.
Lebanon’s economy follows a laissez-faire model. The economy is highly dollarized and the average exchange rate is stable at 1507.5 Lebanese Pounds (LBP)to the U.S Dollar. The country has no restrictions on the movement of capital, capital gains, remittances, dividends, or the inflow and outflow of funds. The Lebanese government’s intervention in foreign trade is minimal.
Lebanon faces major financial challenges, notably a very high level of public debt and large external financing needs. The business climate will remain sensitive to domestic and regional political and security developments. Spillover from the Syrian crisis, including refugee inflows, will continue to impact public infrastructure and services, and growth, which is expected to remain below potential in the near term.
The U.S. Government has neither a bilateral investment treaty (BIT) with Lebanon nor an agreement on the avoidance of double taxation. The U.S. Government signed a Trade and Investment Framework Agreement (TIFA) with Lebanon in 2006. Since 1999, Lebanon has had observer status at the World Trade Organization (WTO), but has yet to accede to the organization. In 2002, Lebanon signed an association agreement with the European Union that entered into force in 2006.
Lebanon announced its commitment to join the Extractive Industries Transparency Initiatives (EITI), a global standard to promote transparency of the extractive sector. The standard requires annual data on licenses, contracts, beneficial ownership, payments, revenues and production.
There are many good reasons for U.S. companies to export to Lebanon. Lebanese consumers are fond of U.S. products, given their high quality and competitive price. English is widely spoken in the business community and many Lebanese have personal experience in the U.S., either through education or work experience. Lebanon has a developed banking sector. Payments for business transactions are often made in U.S. dollars, and nearly all Lebanese banks have American correspondent banking relationships that facilitate financial transactions between U.S. exporters and Lebanese importers.
Lebanon Trade Development and Promotion