Gulf council lowers import tariffs

The rulers of the six-member Gulf Co-operation Council agreed yesterday to speed economic integration among their countries, aiming to promote trade between the regional grouping and the EU.

Meeting in Muscat at their 22nd summit, the council decided to lower tariffs on imported goods to a flat 5 per cent by January 1st, 2003. This advances the date of the customs union from March 2005 and gives members a year to finalise preparations. The decision to move forward the date was taken because several GCC members have already put in place most of the requirements.

To make the customs union possible, the summit endorsed the formulation of uniform standards and specifications for manufactured goods and a single system of quarantine in the agricultural sector. Uniform tariffs have been a key condition for an agreement with the EU, the GCC's main trading partner.

An EU-GCC trade accord, valued at $46 billion (€51.71 billion), has been held up by a dispute over a 6 per cent EU duty on primary aluminium goods from two smelters in Bahrain and the United Arab Emirates (UAE) which produce more than a million tons per year, about 5 per cent of the world's total. The EU pact could help GCC countries to attract foreign investors and accelerate reforms designed to diversify their oil-dependent economies.

The rulers of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE also committed themselves to the establishment of a single currency by 2010 within the Gulf-wide free trade zone and to the gradual accession of Yemen, a small oil producer and one of the poorest Arab countries, to the GCC.