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Free trade zones (FTZs), along with bi-lateral and multi-lateral free trade agreements, have been championed by US policy-makers as an important mechanism in economic liberalization of the Middle East, which is assumed to be a critical step towards political liberalization, democratization, and regional peace. In the meantime, regimes and national economies in the Middle East and North Africa since the 1970s have established trade and economic zones in order to attract foreign investment, create jobs, and encourage manufacturing and exports. While a growing number of political economists have begun to investigate the performance of these projects and contemplate if these FTZs have met their stated objectives, few have considered the political factors behind establishing these liberalized territories enjoying commercial and financial regimes distinct from "mainlands." This paper investigates the emergence of FTZs in the UAE and Iran, which rather than showing liberal economic calculus as the impetus for the adoption of these economic institutions, illustrates the centrality of geostrategic considerations at the moment of their creation. In order to explain the timing and location of such port and commercial facilities as Dubai's Jebel Ali and Iran's Kish Island, one has to consider the regional rivalries of the 1960s, the retreat of the British Empire "East of the Suez," and the US policies and alliances in the late Cold War. Thus, rather than being driven by developmentalist ambitions and interests of local capital and labor, FTZs projects rest on an alliance between rulers, international allies, and cross-border traders, a coalition that is conducive to regime survival and regional hegemony and the generation of new circuits of rents, instead of economic growth, redistribution, or democratization. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]