GCC, EU in new bid to forge free trade agreement
Riyadh, 4th September 2001
Senior officials from the six-nation Gulf
Cooperation Council and the European Union will meet here today in a renewed
move to reach a free trade agreement in near future. The talks will be held
within the framework of a new mandate given to the visiting European officials
by the European Commission following the meeting of the EUís 15-member General
Affairs Council (GAU) on July 16 in Brussels.
This was disclosed here yesterday by Olivier
Quinaux, deputy head of the Belgian mission, whose country currently holds the
rotating presidency of the EU. Quinaux said that a senior official of the EC
Allen Waddans will lead the European delegation at the meeting, which seeks to
pave the way to the development of a free GCC-EU trade area and bolster
cooperation in all other areas.
He said the talks will focus on how to remove
the obstacles on the way of signing the free trade agreement.
The two major economic blocs have forged closer
cooperation in different sectors. Europe, currently, is the largest trading
partner of the GCC and the Gulf states have emerged to be the fifth largest
trading partner for Europe.
The GCC, which groups Saudi Arabia, Bahrain,
Kuwait, Oman, Qatar and the UAE, has long pushed for a free trade agreement with
the EU, which has also been keen to endorse the accord.
The Gulf states have been critical of high
taxes levied by the EU on its refined oil products and aluminum as well as its
massive trade deficit with the EU, which hit $18 billion annually, according to
a report published recently.
The GCC-EU trade exceeded $35 billion last
year, said the report. Saudi Arabia is the largest trading partner of Europe
with two-way trade totaling $17.6 billion annually. The EUís annual imports of
oil from the Gulf countries account for 47 percent of its total oil imports.
Besides, the EU has been ranked as the second largest investor bloc in the Gulf
Asked whether the current Belgian presidency
will succeed in finalizing the free trade agreement, Quinaux said that even if
an agreement can be reached in the near future, it will not be implemented
before the GCC launches the Gulf-wide customs union. ďBut the two major
economic blocs are definitely going to make some substantial progress during the
tenure of the Belgian presidency,Ē he noted.
The optimism to reach a free trade agreement is
based on the progress made by the two sides following the decision of the GCC
leaders to unify customs tariffs by 2005.
The Kingdom recently slashed custom tariffs as
a major step toward forming a GCC Customs Union.