The European Union and the Gulf Cooperation Council signed an Economic Cooperation Agreement in 1988 which laid the framework for the elaboration of a bilateral free trade agreement between the two regional blocs. Formal negotiations began in 1990 and are still not concluded.
While the EU has powerful economic interests in liberalising investment rules in the Gulf States, so that EU corporations may participate directly in the region’s oil, banking, telecoms, port services and other industries, political issues have been publically blamed for blocking agreement. These include demands from the EU with regards to fulfilling standards of democracy and human rights, as well as clauses on cooperation against terrorism and weapons of mass destruction. Human rights groups, such as the International Federation for Human Rights, have urged the EU to insist on respect for freedom of press, women’s rights and labour rights of migrant workers in the Gulf countries in return for any trade concessions granted through the FTA.
At the end of 2008, the GCC formally announced it was suspending the trade talks due to the EU’s insistence on political demands.
last update: May 2012
photo: European External Action Service - EEAS/CC BY-NC 2.0
The European Union and the oil-rich Gulf Cooperation Council will meet this week to discuss a long-stalled free trade deal, officials said yesterday.
The Gulf Cooperation Council and the European Union are very close to striking a free trade agreement as coordination on this issue is in its final stages, an informed diplomatic source close to the process told Kuwait News Agency.
GCC and EU foreign ministers will hold crucial talks in New York next month to remove obstacles hindering a free-trade agreement between the two groups.
The way to counter the momentum of the US bilateral push would be to quickly bring to conclusion the deal between the GCC and the EU and through such a mechanism reinvigorate the multilateral approach to regional relations.
Study commissioned by the European Union
The new customs union and proposed EU-GCC free trade agreement will both appreciably expand trade and improve economic welfare in the GCC countries, with little significant economic impact on the EU.
The GCC is on its way to securing a world first in terms of international economic and trade agrements. Talks with the European Union over the world’s first region-to-region Free Trade Area agreement will be completed by the end of the year, it was declared yesterday.
Progress in the Free Trade Area (FTA) negotiations will top the agenda of the annual GCC-EU foreign ministers meeting being held today in Bahrain, which currently chairs the GCC.
The long-standing row over European duty on aluminium imports from the Gulf, a major irritant in EU-AGCC trade relations, is likely to be resolved this year with both sides gearing up for the final round of talks to seal a free trade agreement.
After several years of being blocked, the signing of the EU-GCC FTA seems imminent. At the same time, the US is launching an ambitious proposal for a US-Middle East Free Trade Area in 2013, with Bahrain being the last country to adhere to a list that already includes Morocco and Jordan.