GCC is fast becoming a regional trading bloc due to recent FTA talks
BY JOSE FRANCO
29 July 2007
DUBAI - The six-nation GCC (Gulf Cooperation Council) is fast becoming a regional trading bloc as more countries now want to forge free trade agreements (FTA) with it following its trade negotiations with China and India.
New Zealand, for instance, recently held its first round of trade talks in Wellington with the GCC countries of Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE and Oman which, sources said, would lead to the signing of a GCC-NZ FTA by this year.
There is also a proposed FTA between the GCC and Australia which, according to reports, would begin later this month.
Analysts earlier said that other countries were wary that they would not be able to protect their respective market presence in the GCC region if and when the Gulf states, as a trading bloc, will have complete FTAs with the world’s two most populous nations.
A statement released yesterday by the New Zealand Embassy in Riyadh quoted NZ Trade Minister Phil Goff as saying that the Gulf states collectively "represent a major trading partner" for his country, and that an FTA would enhance bilateral trade with the GCC.
"An FTA will enable us better to achieve the potential of this relationship," Goff said. "The negotiating process itself is a significant aspect of building a partnership."
Indian Consul General to Dubai Venu Rajamony said on Thursday that his country of one billion people "is keen in pursuing" the ongoing trade talks with the GCC. The GCC, as a regional bloc, signed in 2005 a bilateral accord of economic cooperation with India to initiate FTA negotiations.
Officials from the GCC countries concluded last year the third round of FTA negotiations with China, home to at least 1.2 billion people.
In 2004, the year the GCC and China signed a framework agreement on economic, trade, investment and technological cooperation in Beijing, trade between the two parties surged 46 per cent to $24 billion. While liberalisation is immediate, a complete GCC-China FTA will be realised only at the end of the 10th year after the agreement.
While food and beverage contributed a large part of New Zealand exports to the GCC last year that reached $800 million, Goff said market opportunities are growing and becoming more varied. Other important exports to the GCC now include IT products, advanced industrial goods and services, including education and tourism.
The three-day negotiations were held on July 25-27 that started on discussions about business interests, followed by the official welcoming of the GCC delegation by host New Zealand at the Duxton Hotel in the capital Wellington. The FTA discussions at officials level started on July 26.
Goff said this was the first time that NZ had a delegation representing the six GCC states, adding that an FTA would make his country "secure a stable strategic relationship" with the region and recognise NZ as one of its major suppliers.
"We hope the outcome will be to protect and expand our market share, eliminate barriers to trade and improve market access in areas such as services and investment," he said before the start of the first-round of talks.
He said New Zealand business and non-governmental agencies working in the region contributed so much in the preparation of the talks.