The six Gulf Co-operation Council (GCC) countries, which have negotiated a free trade agreement (FTA) with the EU for more than two decades, are not willing to restart talks without a clear European position on the agreement, said Abdul Rahim Hassan Naqi, Secretary General of the Dammam-based Federation of the GCC Chambers of Commerce and Industry.
In Gulf press remarks, Naqi said the six members, which control nearly 45 per cent of the world’s proven oil deposits, are serious this time about their decision to shelve their negotiations with the EU because of what he described as political terms imposed by the Europeans.
"The GCC countries have seriously suspended the negotiations with the EU this time. They are not ready to restart the negotiations without a clear stand by the EU about the FTA conditions and terms," he said.
"The European side is imposing political conditions besides its demands for the GCC countries to abolish customs tariffs on the EU exports. For this reason, the GCC countries have decided to replace their proposed agreement with the EU with similar agreements with Asian countries."
In a study last month, the Riyadh-based GCC Secretariat blamed the Europeans for the failure to reach a free trade deal despite 20 years of negotiations, saying the EU has presented unacceptable demands.
The study said the GCC countries had sought that agreement to support their economic diversification programmes and bridge a widening deficit in their trade balance with the EU due to a steady rise in European exports to the region and customs barriers imposed by the EU on Gulf exports.
"One of the main obstacles that faced the FTA negotiations is that the EU has not been interested in tackling this massive trade imbalance with the GCC because it is shifting its interest to East Europe," the study said. "Another key obstacle is that the Europeans are not meant with the development of the GCC economies and their diversification programmes. This is illustrated in the limited EU investments in GCC productive sectors and their concentration in the oil sector because they need it. They also do not appear to be meant with any effort to facilitate the transfer of technology to the GCC countries and have been dealing with the region as a key consumer market."
Its figures showed the EU has remained the GCC’s largest economic partner, with their two way trade peaking at nearly $ 132.5 billion (Dh486.68bn) in 2007 compared with more than $ 110bn in 2006 and $ 107bn in 2005. But the surplus has been largely in favour of the EU due to a sharp growth in its exports to the Gulf and the fact that the GCC’s exports to the European markets are confined to oil, gas, petrochemicals and aluminium. According to the study, the trade surplus for the EU hit an all time high of around $ 54.9bn in 2007 compared with only about $ 17bn in 2006.
