GCC urged to privatize border customs

Gulf hydrocarbon producers need to privatize their border customs centers and unify procedures for cross-border movement of goods to tackle obstacles blocking the fill implementation of a landmark agreement to create a customs union.

Representatives of the private sector in the six-nation Gulf Cooperation Council (GCC), which controls 40 per cent of the world’s extractable oil deposits, made the proposal after talks with GCC customs officials in Bahrain this week.

The talks followed complaints by the GCC private sector about long delays of goods at border points and the presence of barriers for the entry of some commodities and dealers despite their agreement to create an EU-style common market.

The representatives from the Dammam-based federation of GCC chambers of commerce and industry made 15 proposals which they said would help end resolve problems blocking trade and investment within the 32-year-old Gulf alliance.

One proposal included the need for the GCC countries to “consider privatizing all border customs points in member states to benefit from Turkey’s experience in this field.”

Another proposal was that members should keep border customs centers open round the clock to handle all goods and prevent long delays.

GCC states—UAE, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman—agreed on the customs union a few years ago and set 2015 as a deadline for a full enforcement. But officials and businessmen have complained that the project is blocked by many obstacles, including long delays of goods and lack of unified customs procedures.

The six members have also approved the creation of a common market while four of them set up a monetary union in line with their 1981 economic pact.

“GCC governments also need to allow the private sector to participate in all decision concerning customs issues,” the chambers said in a statement sent to Emirates 24/7.

“They should also agree on unifying all customs procedures, tariffs and certificates of origin for products…we also call on the authorities to accept certificates of origin which are internationally approved without the need for examining them locally.”

In a recent study, the Emirates Industrial Bank (EIB) said the full enforcement of the GCC customs union will sharply expand trade among members following a surge in such exchange over the past decade.

Its figures showed an initial accord to unify GCC customs tariffs has already given rise to trade among member states, surging from around 6.5 per cent of their total trade in 2001 to 11.5 per cent in 2005 and 15 per cent in 2011.

The report expected a full implementation of the customs union to further push up inter-GCC trade to around 20 per cent in 2015 and 25 per cent in 2020.

The report noted that GCC states have delayed the full enforcement of the customs union six times since they signed an initial pact in 2001 because of many obstacles.

While most of the disputes have been tackled, one major obstacle is still blocking the full accord—the distribution of customs tariff revenue among members.

In statements last year, the Riyadh-based GCC secretariat denied reports that the customs union would again be delayed because of persistent rifts.

“We are pursuing efforts to form a single customs territory with the outside world while member states will soon agree on some of the relevant requirements of the movement of goods between them,” it said.

 

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