Emirates Business 24/7 | Aug 21, 2008
GCC criticises EU for delaying free trade deal
By Nadim Kawach
Gulf oil producers have criticised the European Union (EU) for delaying the signing of a landmark free trade agreement (FTA) that could support their long-standing bid to diversify their oil-reliant economies.
The Federation of Chambers of Commerce and Industry in the six-nation Gulf Co-operation Council accused the Europeans of putting obstacles in the talks on the FTA and urged them to remove these barriers.
"There is a need to sign this agreement for the creation of a free trade zone as soon as possible in order to expand trade exchange and investment between the two sides," said Abdul Rahim Naqi, the federation’s secretary general. "This agreement must cover all products and services without any exception and should lead to the creation of joint establishments to increase co-operation in intellectual property. For this purpose, we call on the European side to quickly remove all the obstacles it is imposing on the signing of this vital agreement, which will ensure the needed balance in our economic relations."
In a statement sent to Emirates Business yesterday from the federation’s headquarters in Dammam, Naqi urged the EU to take into consideration the GCC’s efforts to diversify their economies and income sources through the expansion of industries and other non-oil sectors. "Both sides have common interests and we both should work to serve these interests."
His figures showed EU barriers on GCC petrochemicals and other non-oil exports have kept the trade balance largely in favour of the Europeans. While the EU has also remained a key market for investments by the GCC countries, it has not given equal interest to the Gulf, he said.
Between 2002 and 2006, the cumulative foreign investments by the GCC nations totalled about $542 billion (Dh1.99 trillion), of which nearly $100bn were pumped into the EU. In contrast, the EU capital flow into the GCC stood at only about $2.6bn in 2006, less than one per cent of the European capital outflow.
The figures showed the GCC was the fifth largest market for European products in 2006, with EU exports to the region standing at nearly €55bn (Dh298bn). Its imports from the GCC, mostly oil and petroleum products, were estimated at €37.5bn, with a surplus of Dh95 billion.
"Gulf banks have also established strong presence in key EU markets, mainly London and Paris, and are participating in major projects there," Naqi said.
He made the statement to announce the organisation of a GCC-EU conference and exhibition in London from November 12 to 13, in which hundreds of officials and businessmen will participate. He said the event would focus on economic and investment co-operation and would be an opportunity for both sides to discuss progress made in their FTA talks.
$100bn: Investments by the GCC nations in the EU out of the cumulative foreign investments between 2002 and 2006
$2.6bn: Capital flow from the EU into the Gulf in 2006, less than one per cent of the region’s capital outflow to Europe.