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GCC-EU free trade deal likely to be inked in June

ABU DHABI - The long-awaited Free Trade Agreement (FTA) between the Gulf Cooperation Council (GCC) and the European Union (EU) is likely to be signed at the joint ministerial meeting to be held at Luxembourg on June 14, according to Gonzalo de Benito, Ambassador of Spain to the UAE.

Spain currently holds the temporary Presidency of the Council of the European Union, and the Ambassador disclosed this on the sidelines of a lecture programme organised here on Sunday evening to coincide with the Europe Day at the Zayed University.

“We are keen to get the GCC-EU FTA during the presidency of Spain at the EU. Our presidency of EU will be till the end of June,” the Ambassador told Khaleej Times here.

“We have finished almost the pending issues in the conclusion of the agreement. We have found a common ground even on the political clauses which EU includes in all the FTAs. These clauses aver the commitment from both the sides of the signatories of the agreement to respect human rights, democracy etc. The only issue that is pending is relating to export duties, and intense efforts are on to settle it also within weeks,”Gonzalo de Benito said.

The Ambassador said once signed the GCC-EU FTA would be the biggest free trade agreements in the world between two regions. The EU currently has 27 members while the GCC comprises of six countries.

Earlier, delivering a talk on the ‘Present and Future of GCC-European Union Relations’ organised as part of the Europe Day programme, Christian Koch, from Gulf Research Centre, said there was growing convergence of interests now between the countries of the GCC and EU.

Economics predominates in this relation with the trade volume above 90 billion euros. But the relationship is growing in fields of education and energy matters. Europe is also looking at Gulf issues with growing strategic perspective, he said. Gulf will produce 35 mb/d of oil in 2020, representing 33 per cent of world total demand. The presence of major sovereign wealth funds, large infrastructure projects and domestic investment are some of the other factors that will underscore the continued importance of the Gulf region. The GCC Common Market and possible Common Currency will also enhance those prospects, Dr Christian said. EU on the other side provides internal market of 490 million people. The total GDP of EU countries is $9 trillion and accounts for 25 per cent of the global GDP. EU is alsoa main player in global trade negotiations.Despite the financial crisis, the euro is the second reserve currency and is growing, he recalled.

Pointing out that the FTA negotiations between the GCC and the EU had started way back in 1990, the Ambassador said “we are quite happy that these negotiations are now coming to fruitful conclusion.”

Replying to questions he said normally the EU does not permit imposition of export duties by countries which are signatories to the FTAs. Some GCC countries charge export duties, but they can exist only in limited scales under the FTA. “We are making all efforts to work out a common agreement on this last issue through the responsible bodies in the European Commission, and if we are able to achieve that we will be able to ink the deal in the GCC-EU Foreign Ministers’ conference to be held at Luxembourg on June 14,” he said. Ambassadors of the Member States of the EU to the UAE and delegation from the EU also attended the programme.

ramavarman@khaleejtimes.com