Gulf States Warn EU they Could Abandon Planned Free-Trade Accord

Published April 24th, 2001 - 02:00 GMT

The Gulf Cooperation Council (GCC) could abandon a planned free-trade agreement with the European Union (EU) if negotiations to broker a deal were not expedited, warned Bahrain's Foreign Minister Sheikh Mohammad bin Mubarak al-Khalifa, whose country is the current GCC president. 

Sheikh Mohammad, addressing the meeting between the two blocs in Manama on Monday, said the EU "must take into consideration strategic interests" that link the groupings and "help lift obstacles" blocking the signing of an accord, reported the Gulf Daily. 

"Given the slowness in negotiations, GCC states fear they might have to reconsider their commitment to the project," he said. 

The six-nation GCC has ever since 1988 pushed for a trade deal with Europe and set a deadline of 2005 for a customs union within the region, a pre-condition for the accord with the EU. 

During the meeting, the two sides exchanged views on a number of economic and political issues, including the free trade agreement, the GCC joint defense agreement, Middle East peace process, Iraq and Iran, said the paper. 

Shaikh Mohammed led the GCC delegation, which included foreign ministers of all the GCC states as well as GCC Secretary-General Jamil Hujailan. 

The EU side was led by Swedish Deputy Prime Minister and Foreign Minister Lena Hjelm-Wallen. 

The GCC is critical of high taxes levied by the EU on its refined oil products and Gulf aluminum, as well its massive trade deficit with Europe which Sheikh Mohammad said hit 11 billion dollars in 1999. 

"The EU has already signed similar (free-trade) agreements with countries around the Mediterranean and others whose markets are far less attractive than those of the GCC countries," Sheikh Mohammad said. 

Shaikh Mohammed said the GCC also called on the EU to support Saudi Arabia’s entry into the World Trade Organization (WTO), the paper quoted him as saying. 

He also called on the EU to establish its long overdue office of the European Commission (EC) in Riyadh. 

“We still hope that the EU will shortly be able to adopt the mandate in its final form, free of surprises that could take negotiations back to square one,” said Shaikh Mohammed. 

But EU officials insisted there could be no GCC-EU free trade agreement until the GCC Customs union is implemented. 

The EU is also widening the scope of the proposed agreement negotiations to include trade in services, besides goods, said European Commission (EC) member Pascal Lamy. 

However, both sides are very keen to move the free trade agreement process at a faster pace, said British Foreign Office Minister Brian Wilson. 

The EU is the GCC's biggest trade partner, while the Gulf is the EU's fifth largest exports market, he noted. 

According to official statistics released in Manama, trade between the two groups increased to 51.5 billion euros in 2000 compared to 37 billion euros the year before. 

Gulf investments in the EU are estimated at 122 billion dollars, representing 35 percent of all the region's investments abroad – 





© 2001 Al Bawaba (

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