GCC approves customs union, opens door to free trade pact with EU
A long-delayed customs union within the Gulf Cooperation Council (GCC) is scheduled to go into force on January 1, 2003, concluded the organization’s 23rd annual summit, which drew to an end in Doha, Qatar, on Sunday, December 22. Under the unified economic agreement, all internal GCC trade will be duty-free, while external customs tariffs will collectively be lowered to five percent.
The move is considered a major stepping-stone towards a 2005 realization of a regional monetary union and the forging of a single market with a new currency by 2010. It will also allow the GCC bloc to commence negotiations for a lucrative free trade agreement (FTA) with the EU. The EU is the GCC's leading trading partner, with trade exchanges reaching $46 billion per year. The Gulf region’s overall commercial exchanges are estimated at $270 billion.
Current trade between the affluent GCC member states remains limited, at around $16 billion per annum, as nearly 80 percent of their collective national incomes is generated by a single product—oil. On the Doha summit’s agenda was a Qatari proposal, urging the construction of a new oil export pipeline that would carry GCC crude to a unified depot in Oman, bypassing the volatile Persian Gulf.
Established in 1981, the GCC is a loose political and economic alliance between six affluent Arabian Gulf states—Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates (UAE). With a combined population of 30 million, the GCC member states sit atop half of the world's crude oil reserves and account for over 20 percent of international crude exports.
Only two heads of state, the rulers of Qatar and Oman, attended the Doha summit. The leaders of the other four GCC members opted to send their deputies in protest of Qatar’s refusal to restrain its highly popular Al-Jazeera satellite television, whose broadcasts are viewed as offensive by the monarchs of its neighboring Gulf. — (menareport.com)
© 2002 Mena Report (www.menareport.com)