GCC Members Seek To Reassure Over Saudi Stance On FTAs

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

06 January 2005

Officials from other Gulf Cooperation Council (GCC) member states are seeking to play down the rift between Saudi Arabia and Bahrain over the latter's recent completion of a free trade agreement with the United States.

Saudia Arabia objects to the fact that although the GCC customs union agreement imposes a 5% duty on all goods entering GCC countries from overseas, the bilateral agreement between Bahrain and the US grants the United States duty-free access for consumer and industrial products.

According to regional media reports, the Saudi authorities have threatened to take legal action and to reinstate customs tariffs in response to the US-Bahrain FTA.

However, speaking to Gulf News on Tuesday, director-general of the Dubai Department of Economic Development, Mohammad Ali Al Abbar attempted to pour oil on the troubled waters, predicting that:

"Saudi Arabia's stance will not have any negative impact on the GCC. We are all cousins and relatives, we are close to one another and we will always be close to each other."

Dubai-based economist, Dr Mohammad Assoumi, meanwhile, suggested that:

"Since the FTA between Bahrain and the United States has already been signed, the best thing for Saudi Arabia to do now is to impose a five per cent duty on US goods re-exported from Bahrain. In future, the GCC must negotiate as a group."

The United Arab Emirates and Oman are also reported to be in talks with the United States regarding free trade agreements.

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