GCC seeks new phase of economic ties with EU

The secretary-general of the Gulf Co-operation Council (GCC) has called for a new phase of economic and trade relations with the European Union under a future vision based on common interests and equal opportunities.

Abdul Rahman Al Attiyah was speaking at the First Gulf-French Economic Forum in Paris yesterday.

Al Attiyah asked EU countries to formulate a free trade pact and to overcome obstacles in the way of setting up a trade and economic partnership between the two sides.

The secretary-general mentioned several reasons that can kickstart a new phase of Gulf-EU economic and trade ties. He said GCC member-states have some of the world's largest proven oil and natural gas reserves for which there is an increasing demand in the EU. This makes it inevitable for the EU to work in earnest with the GCC to secure its future energy needs at competitive prices. The GCC oil and petrochemicals sector represents a big opportunity for investment by European firms, Al Attiyah added.

He said the GCC countries should pursue economic and trade policies in harmony with the requirements of the World Trade Organisation as well as a free market.

"Agreements by the European and Gulf sides on equal and balanced conditions for energy sources in terms of price, and other co-operation mechanisms, will secure a stable price for oil and gas insulated from their fluctuating world prices," he said.

Al Attiyah asked EU countries to protect investment and capital in European banks and companies against erosion and freezing to ensure that the investments serve common goals and contribute to economic stability.

The GCC secretary-general also said the private sectors in the Gulf and Europe should be steered towards setting up joint enterprises with Gulf capital and European technology.

He also urged European countries to jointly work with various peace-loving countries of the world to support the security and economic stability of the Gulf and the Middle East.

Al Attiyah said there was a need for technical help from Europe to develop and support scientific research and advancement in the Gulf, as well as aid to handle environmental pollution.

Exports from the Gulf should be allowed easy access to European markets, especially petrochemicals, he said, and highlighted a tilt in the trade balance in favour of Europe. In 2007 the trade surplus was some $55 billion (Dh202bn) in the EU's favour, out of a total trade volume of $133bn. He attributed this to several obstacles, including a go-slow policy by the EU to sign free trade agreements as well as the imposition of high taxes on GCC exports by the EU.

Other issues in the EU-GCC relationship are limited European investments in the GCC industrial sector and an insistence by the EU on linking any free trade agreements to political issues, Al Attiyah said.