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Gulf States To Press EU On Free-Trade Area

by Ulrika Lomas, Tax-News.com, Brussels

11 December 2002


The Gulf Co-operation Council states (Kuwait, Qatar, Oman, Saudi Arabia, Bahrain, and the United Arab Emirates) will meet EU officials in Brussels today to discuss the long-planned free trade agreement between the two blocs. GCC officials said that with their own Gulf customs union about to become a reality they would firmly tell their European partners that it is time for the talking to stop.

"The meeting is important because it coincides with the GCC customs union," said an official from the Riyadh-based GCC Secretariat. "We will give them a strong message that their demand is about to be met and it's only days before the customs union is launched ... time is an important factor as we have been negotiating for nearly 14 years ... conditions have changed for the better, so there are no more excuses."

All along, the EU has insisted GCC states must first unify their customs tariffs to be treated as one group instead of six scattered economic entities. Although most GCC nations have joined the WTO, the EU is hanging back, saying that there are remaining human rights and other issues that need to be tackled.

GCC states feel they are not treated fairly by the EU which imposes high tariffs on their petrochemical and aluminium exports while the EU has free access to Gulf markets. The GCC customs union, which covers more than 1,500 imported items, say officials, will give birth to the Middle East's biggest economic bloc, with a GDP of nearly $320 billion in 2001, around 45% of the combined Arab economy.

The GCC agreement is being put in place for three years, at the end of which it will be re-evaluated by GCC members. Member states of the GCC are also planning to establish monetary union by 2005, and a single currency five years after that.


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