AME Info | 26 July 2007
UK exporters losing out over EU’s protracted Free Trade Agreements with Gulf nations
UK businesses are increasingly likely to lose out to the US on valuable Gulf export opportunities because it is taking so long for the EU to negotiate a Free Trade Agreement (FTA) with the region’s key states, says Trowers & Hamlins, the international law firm.
According to Trowers & Hamlins, a commitment between the EU and the Gulf Co-operation Council (GCC) to enter into negotiations on a Free Trade Agreement was first agreed back in 1989. However, 18 years later, negotiations with the six members of the GCC (Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the UAE) are still ongoing.
By contrast, the US secured FTAs with Oman last year and Bahrain in 2004, as part of its plan to establish a Middle East Free Trade Area by 2013. These FTAs cover many issues ranging from the elimination of import tariffs, the liberalisation of some service sectors and increased protections for intellectual property. Negotiations are also underway with both the UAE and Saudi Arabia.
Martin Amison, Head of International at Trowers & Hamlins says, ’This interminable delay in getting a deal hammered out is very disappointing for British business. While the EU’s negotiations with the GCC seem to have run into all sorts of hold-ups, the Americans are seizing the opportunity to improve trade relations with these oil-rich, economically vibrant states.’
’The knock on effect is that UK plc is increasingly likely to find itself at a major disadvantage in maintaining and strengthening its position in the highly profitable Gulf export market.’
’British companies have invested a lot of effort into becoming leading exporters to countries such as Oman. However, the lack of a comprehensive FTA is beginning to undermine that position.’
According to estimates from the Government agency UK Trade & Investment (UKTI) British exports to the Middle East were worth more than £10bn last year.
Further negotiations between the EU and GCC are expected in July. Says Martin Amison, ’Given all the disappointments from previous rounds of negotiations, we really hope that the EU can finally push through a deal by the end of the year.’
Martin Amison adds, ’The EU seems to have placed a lot of store by agreeing so-called Euro-Med Agreements (EMAs) with nearby nations around the Mediterranean basin*, which do include certain trade arrangements, amongst other things. But so far nothing has been achieved in the Gulf.’
’Ratifying a Free Trade Agreement with the buoyant economies of the GCC region, which is a major world economic player, should really be a top trade priority.’
Under the terms of EMAs, the whole non-EU Mediterranean region now enjoys duty free access to the EU market for manufactured goods. Those countries have up to 12 years to reciprocate by dismantling their tariffs to the EU. Agreement has yet to be reached on liberalising trade in services. EMAs are not solely trade focussed; they cover other aspects such as social, cultural and political co-operation as well.
*EMAs have been signed with Syria, Tunisia, Israel, Morocco, Jordan, Egypt, Algeria and Lebanon. An interim EMA has been signed with the Palestinian Authority.