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Gulf states set to start FTA talks with Iran

Emirates Business 24/7 | Thursday, September 11, 2008

Gulf states set to start FTA talks with Iran

Experts say a free trade agreement between the GCC countries and Iran would benefit both sides as it would open GCC markets for Iranian products and vice versa.

Gulf states have decided to accept an offer from Tehran to begin talks on a free trade agreement (FTA) that will add Iran to the list of many countries negotiating with the region for such a deal, a Qatari official was quoted as saying yesterday.

Finance and Economy undersecretaries from the six-nation Gulf Co-operation Council (GCC) approved the plan at talks in Riyadh, Saudi Arabia, on Tuesday.

The two-day meeting covered proposals announced by Iranian President Mahmoud Ahmadinejad at the GCC annual summit in Doha last year to open FTA negotiations with the 27-year-old Gulf alliance.

"We discussed the Iranian President’s proposals to expand GCC-Iran cooperation," said Khalaf Al Manai, Qatari Finance Ministry Undersecretary. "The undersecretaries agreed on starting the first official round of negotiations on an FTA with Iran," he told the Saudi newspaper Aleqtisadiah.

Manai did not specify a date for the talks, which have been sought by Iran for more than a decade to establish strong trade, economic, political links with its Gulf Arab neighbours.

Iran already enjoys good commercial links with the GCC but its political ties with most members have been marred because of ideological factors and its occupation of the UAE islands of Abu Mousa, Greater and Lesser Tunbs.

Experts said an FTA between the GCC and Iran would benefit both sides as it would open Gulf markets for Iranian products and give GCC members bigger access to a massive market in Iran and nearby countries.

Iran is already the largest market for UAE’s non-oil exports and re-exports, which accounted for the bulk of their two-way trade of more than $12 billion (Dh44bn) last year. According to the Iranian Business Council in Dubai, more than 10,000 Iranian companies operate in the UAE.

Iran, which controls the world’s second largest oil and gas wealth, is an Opec member along with four GCC states - UAE, Saudi Arabia, Kuwait and Qatar. The GCC, which also groups Bahrain and Oman, has been locked in FTA negotiations with several countries and groups, including the European Union, Japan, China, India and the United States.

 source: Emirates Business 24/7