GCC Summit Accelerates Customs Union, Paves Way for EU Free Trade Pact
Leaders of the six member countries of the Gulf Cooperation Council (GCC) agreed during their 22nd summit yesterday to several measures that will increase the economic integration between their countries. Most prominent was the decision to adopt a GCC customs union. Uniform tariffs have been a key demand of the European Union for a Free Trade Pact.
The customs union was originally agreed at the 20th GCC summit in 1999, and although it was scheduled for introduction from March, 2005, several GCC member countries have already made significant strides to put the customs union into effect at an earlier date then planed. In the 22nd summit in Oman, the deadline for a full GCC customs union has been moved up from March 2005 to January 2003, giving member countries one year to finalize preparations.
Under the decision of the summit, all GCC member countries will adopt a unified tariff rate of five per cent on all imported goods by January 1, 2003. In order to make the customs union possible, the council also endorsed the formation of uniform standards and specifications, and agreed on a uniform system of agricultural quarantine.
The GCC countries signed a “Unified Economic Agreement” upon the formation of the Council in 1981, and have been cooperating under its provisions to this date. However, in seeking a free trade pact with the European Union, the region's main trading partner, the Gulf countries came up against an insistent European Union demand that they adopt uniform customs.
Reuter reported that Gulf officials, who have accused the EU of foot-dragging over free trade, say that the GCC has now fulfilled its requirements, and warned they may reconsider the pact if no progress is made in talks on the deal - hampered by EU demands for GCC common tariffs and by protectionist EU policies. The GCC envoy to the European Union, Najeeb al-Rawas, told reporters: "Now there are no more excuses for them to postpone signing the free trade zone (agreement) between the two blocs."
Alongside the decision on the customs union, GCC summit participants also determined to form a monetary union. This will lead to the most visible symbol of Gulf economic integration the adoption of a uniform currency common to all member states (much like the Euro in Europe). The GCC leaders agreed to move ahead with a monetary union, and to introduce a single currency no later then January 2010. (www.albawaba.com)
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