GCC Confident Of Free Trade Agreement With EU

by Lorys Charalambous, Tax-News.com, Cyprus

27 February 2002

Prior to today's meeting with the European Union in Spain, Gulf Cooperation Council (GCC) chiefs seemed optimistic that a free trade agreement between the two economic blocs can now be reached, following the customs tariff accord agreed upon last year by GCC members.

The European Union and the GCC - whose member states comprise Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates - have been in discussion over the possibility of putting in place a free trade agreement for over 13 years.

The six oil-rich nations are keen to address the high taxes imposed by the EU on Gulf petrochemical and aluminium products, but progress in negotiations has been stalled by the absence of a GCC customs accord, which the European Union has always insisted upon as a pre-condition to serious free trade agreement talks.

However, following the decision in December to put such an accord in place two years ahead of schedule, in 2003, and to push for GCC monetary union by 2010, prospects for success at the Granada summit look bright.

'There is no doubt that after the last Gulf summit in Muscat, the door is wide open for the GCC and EU to seal a free-trade agreement,' Bahraini economist Mohammed Al Assumi told the Agence France-Presse news service this week. Mr Assumi also observed that: 'The conclusion of such an agreement no longer risks being blocked by traditional EU demands for human rights after the great progress shown by the GCC states.'

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