GCC Finance Ministers Accept Plans For Duty-Free US Imports

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

27 May 2005

According to reports in the regional and international media, Gulf Cooperation Council (GCC) finance ministers recently agreed that duty-free US imports will be exempted from the unified tariff system.

GCC member state Saudi Arabia was angered when Bahrain reached a bilateral agreement with the United States last year, and when the UAE and Oman launched free trade talks with that end in mind. The Saudi authorities argued that such arrangements represented a violation of the GCC customs agreement, under which import duties have been set at 5%.

However, an unnamed GCC source told Reuters on Tuesday that:

"They (the finance ministers) accepted the principle that the United States should be given an exemption. The principle has been accepted that the United States and only the United States is given that exemption."

Possible solutions put forward during the recent meeting on the matter reportedly include the payment of the 5% duty by the governments of GCC members with free trade agreements with the US into a regional fund, tagging duty-free products exported under the FTAs, or routing them via existing free trade zones in the region.

The matter will go before GCC foreign ministers for approval on June 4.

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