GCC urged to be prepared for counter trade measures

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Abdel Aziz Abu Hamad Aluwaisheg, director general of international economic relations at the Gulf Cooperation Council (GCC), suggested that the GCC should preserve its ability to take "targeted counter measures," if other countries impose new tariffs on oil, gas or petrochemicals.

Aluwaisheg referred to recent research, including that by professor Simon J. Evenett from the University of St. Gallen, Switzerland, who was also the session’s moderator. He said the message that research conveys is that protectionism is back and may get worse in the next year or so. But, according to him, the new forms of protectionism have been less severe than had been feared, thanks in part to the vigorous advocacy of the G20 against protectionism.

He said the Europeans want to impose new tariffs on oil in the name of fighting climate change. This would be in addition to the already exorbitant internal taxes that almost every European country levies on oil. Similarly, in the United States, he said, there is renewed talk about the $ 2 tax on imported oil.

"What is a country like Saudi Arabia to do then? What is a region like the GCC to do?" he asked, but advised against any blunt retaliation, as it would be like "shooting ourselves in the foot, because a healthy international trading system should be of utmost interest to us."

The senior GCC official called for moving cautiously on local, regional and international fronts to safeguard the interests of the Gulf economies while also contributing to global recovery.

He highlighted some important steps that Saudi Arabia recently took toward opening up its market: In 2001, it unilaterally reduced its import tariffs by over 30 percent; in 2005, it joined the WTO and in the process eliminated many barriers to foreign investment and outlawed the most egregious forms of monopoly; and in 2008, it eliminated protective tariffs on scores of goods.

The Saudi Arabian General Investment Authority (SAGIA), he said, has vigorously sought and assisted foreign investors to enter into areas that had been out of limits to foreign investors. "But we should not stop there, despite the international trend toward protectionism, because liberalizing our own market is intrinsically beneficial," he opined.

On the regional level, Aluwaisheg referred to the GCC’s measures toward liberalizing its internal market, including two recent milestones: The GCC Customs Union and the Common Market.

 

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