Bound to meet an­nu­ally un­der the EU-GCC Co­op­er­a­tion Agree­ment of the late 1980s, the GCC re­port­edly can­celled the 24th GCC-EU min­is­te­rial meet­ing, sched­uled to be held on June 23, fol­low­ing a state­ment sup­ported by sev­eral Euro­pean coun­tries, that ap­paren

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The GCC re­port­edly can­celled the 24th GCC-EU min­is­te­rial meet­ing, sched­uled to be held on June 23, fol­low­ing a state­ment sup­ported by sev­eral Euro­pean coun­tries, on the hu­man rights sit­u­a­tion in Bahrain dur­ing a re­cent gath­er­ing of the United Na­tions Hu­man Rights Coun­cil (UNHRC) in Geneva.

The UNHRC state­ment in Geneva ex­pressed con­cern at the hu­man rights sit­u­a­tion in Bahrain, cit­ing, among oth­ers, long prison sen­tences for ex­er­cis­ing rights to free­dom of peace­ful assem­bly and of as­so­ci­a­tion, ill-treat­ment and tor­ture in de­ten­tion fa­cil­i­ties, and other rights vi­o­la­tions.

With the high-level meet­ings be­tween the Euro­pean Union (EU) and the Gulf Co­op­er­a­tion Coun­cil (GCC) usu­ally dis­cussing a se­ries of is­sues of mu­tual in­ter­est or con­cern, like en­ergy, fi­nan­cial cri­sis and cli­mate change, it is pos­si­ble to say that in ad­di­tion to ad­dress­ing loom­ing threats and con­tin­ued in­sta­bil­ity in the Gulf and the wider Mid­dle-East, the op­por­tu­nity to try to find com­mon ground for a de­ci­sive de­ci­sion on the last few re­main­ing ob­sta­cles of the long-awaited EU- GCC Free Trade Agree­ment (FTA) is missed.

EU- GCC FTA could make a dif­fer­ence

Buoy­ant on good money de­rived from oil and nat­u­ral-gas ex­ports and stead­fast lead­er­ships hav­ing de­cided on re­gional in­te­gra­tion, do­mes­tic mar­ket lib­er­al­i­sa­tion, eco­nomic di­ver­si­fi­ca­tion and in­ter­na­tional com­pet­i­tive­ness, the harsh desert coun­tries like Bahrain, Kuwait, Oman, Qatar, Saudi Ara­bia and the United Arab Emi­rates have steadily worked to reach eco­nomic growth.

GCC states have de­cided to sign-up for the mul­ti­lat­eral free trade su­per­vis­ing World Trade Or­gan­i­sa­tion (WTO), and are will­ing to be an in­te­gral part of the emerg­ing multi-po­lar global po­lit­i­cal econ­omy, that re­sulted in en­hanced mar­ket ac­cess op­por­tu­ni­ties for other WTO-mem­bers in wealthy, and fast-grow­ing GCC mar­kets.

In­deed, re­mov­ing cum­ber­some cus­toms pro­ce­dures, or re­duc­ing the costs of mov­ing goods and ser­vices across in­ter­na­tional bor­ders via trade fa­cil­i­tat­ing agree­ments means in­creased com­mer­cial op­por­tu­ni­ties for those en­gaged in im­port and ex­port.

Eco­nomic glob­al­i­sa­tion, or gangs of Ben-

gali brick-lay­ers us­ing U.S.-made ce­ment with Chi­nese-man­u­fac­tured con­crete re­in­forc­ing rods on con­struc­tion sites su­per­vised by Bri­tish en­gi­neers on be­half of lo­cal real es­tate de­vel­op­ers are just as com­mon across the GCC as mod­ern, well-equipped na­tional air­lines com­posed of mul­ti­ple-na­tion­al­ity cabin crews from Qatar and the UAE pick­ing up pas­sen­gers in ma­jor Euro­pean air­ports for busi­ness and leisure travel around the globe.

Loom­ing threats and the con­tin­ued in­se­cu­ri­ties of the post-9/11 world have led to im­ped­i­ments to trade in ser­vices, though for the phys­i­cal trans­fer of cross-border ser­vices, providers have been sub­jected to stricter se­cu­rity poli­cies and tougher im­mi­gra­tion leg­is­la­tion.

Euro­pean com­pa­nies cite re­stric­tive for­eign own­er­ship as a bar­rier to in­vest­ment in the GCC, and GCC in­vestors have high­lighted cum­ber­some visa poli­cies for busi­ness trav­el­ers as a chal­lenge fac­ing Gulf-in­vestors in the EU. As a re­sult of this a se­ries of both tar­iff and non-tar­iff bar­ri­ers to trade were iden­ti­fied as ne­go­tiable items in the en­vis­aged trade deal be­tween the two re­gional blocs.

Real ne­go­ti­a­tions for an agree­ment pro­vid­ing pro­gres­sive and re­cip­ro­cal lib­er­al­i­sa­tion of trade be­tween the EU and the GCC be­gan fol­low­ing an an­nounce­ment in 2001 of the cre­ation of a GCC cus­toms union. But with re­sults even­tu­ally fall­ing below ex­pec­ta­tions, and hav­ing cre­ated strong economies, and then rea­son­ing that the EU should not see and pa­tro­n­ise the GCC as a weak eco­nomic bloc since the EU con­stantly brought up is­sues and de­mands that had noth­ing to do with trade, or the econ­omy as such, more as­sertive GCC states de­cided to sus­pend the bi­lat­eral trade talks at the end of 2008.

In order not to lose in­ter­est, and to keep in­for­mal con­tacts be­tween ne­go­tia­tors alive, a EU- GCC Joint Ac­tion Pro­gram was agreed upon in 2010, but failed to de­liver mean­ing­ful re­sults.

Recog­nised as economies in devel­op­ment but clas­si­fied last year as high-in­come coun­tries for three con­sec­u­tive years by the World Bank, the pref­er­en­tial ac­cess as­signed to the six-na­tion GCC was lifted by the EU, which spans 28 mem­ber states.

De­spite eco­nomic and fi­nan­cial set-backs caused by the credit crunch, and not­with­stand­ing the po­lit­i­cal di­a­logue hav­ing led to snags and mis­un­der­stand­ings, EU- GCC trade con­tin­ues to per­form well, with the ob­ser­va­tion though that a sound, com­pre­hen­sive, WTO-com­pat­i­ble EU- GCC trade deal could make an in­ter­est­ing dif­fer­ence.

Break­ing new ground

Al­ready sub­ject to the en­hanced com­mer­cial pos­si­bil­i­ties made pos­si­ble by the forces of eco­nomic glob­al­i­sa­tion, the time is right to be­gin to re­flect on a se­ries of ex­ist­ing re­al­i­ties and to com­pre­hend the con­se­quences of per­ma­nent fail­ure.

Still fi­nan­cially and eco­nom­i­cally con­strained on their credit crunch-af­fected home mar­kets, Euro­pean com­pa­nies con­tinue to win mega-projects across the GCC, but in­creas­ingly face com­pe­ti­tion from oth­ers.

Al­ready dis­ap­pointed and hav­ing the op­tion to shake bi­lat­eral trade hands ev­ery­where, the EU should re­alise that eco­nom­i­cally pros­per­ous and fi­nan­cially wealthy GCC states are not only able to po­si­tion them­selves in a rather unique bar­gain­ing po­si­tion, but are also able to be­come more straight­for­ward in re­fus­ing a trade agree­ment on terms dic­tated by the EU.

En­ergy mar­kets and geopo­lit­i­cal align­ments have changed sub­stan­tially, some be­com­ing prac­ti­cally au­tonomous, oth­ers re­main­ing crit­i­cally de­pen­dent on ex­ter­nal oil and nat­u­ral-gas sup­pli­ers.

Although the po­lit­i­cal com­po­nent and the hu­man rights di­a­logue can­not be ig­nored given the manda­tory sta­tus of these no­tions in EU trade agree­ments, the sought trade deal is about en­hanc­ing com­mer­cial op­por­tu­ni­ties and other ar­eas of co­op­er­a­tion, not on GCC states seek­ing as­so­ci­a­tion to the EU.

In the process of ac­com­plish­ing eco­nomic di­ver­si­fi­ca­tion and ac­quir­ing in­ter­na­tional com­pet­i­tive­ness, GCC states need to en­sure fair and eq­ui­table mar­ket ac­cess to re­mu­ner­a­tive mar­kets for those goods they plan to man­u­fac­ture.

Not in­ter­ested nor trade pol­icy bound in in­ter­fer­ing with the do­mes­tic poli­cies of their trad­ing part­ners, Asian coun­tries seized the mo­men­tum and re­in­forced their com­mer­cial ties with GCC states.

Re­al­is­ing that they have an ac­tual need to se­cure vi­tal im­ports for ex­pand­ing economies with fast-grow­ing pop­u­la­tions, GCC states are also hav­ing an im­mi­nent in­ter­est to find ways to pre­serve vast but even­tu­ally de­plet­ing oil and nat­u­ral-gas re­serves for both do­mes­tic back-up and prof­itable ex­port.

Know­ing that GCC ex­ports to the EU will re­main low com­pared to EU ex­ports to the GCC and recog­nis­ing that it is rea­son­able to say that the hered­i­tary ruled GCC states are re­spon­si­bly run and in the process of grad­u­ally trans­form­ing them­selves po­lit­i­cally, the EU could, per­haps, con­sider a de­gree of flex­i­bil­ity.

GCC states, not only be­ing a sig­nif­i­cant trad­ing part­ner with ex­pected growth across var­i­ous sec­tors but also ever more an im­por­tant geopo­lit­i­cal player and a grow­ing re­gional diplomatic ac­tor, and tak­ing into ac­count that in­creased eco­nomic and po­lit­i­cal in­ter­de­pen­dence cou­pled with ever more global in­for­ma­tion con­nec­tiv­ity is likely to in­ter­twine global eco­nomic fac­tors with do­mes­tic pol­i­tics, both the GCC and the EU, should, with a wink to the Arab Spring up­ris­ings, the atro­cious civil war in Syria and the re­newed sec­tar­ian vi­o­lence in Iraq, re­alise that re­gional calm and do­mes­tic sta­bil­ity is a vi­tal con­cern for both and that there­fore a re­al­is­tic and mean­ing­ful se­cu­rity di­a­logue can be of mu­tual ben­e­fi­cial in­ter­est.

Thus, it is due to grow­ing eco­nomic and po­lit­i­cal in­ter­de­pen­dence be­tween states and coun­tries, the process of EU en­large­ment ac­knowl­edg­ing Turkey's can­di­date sta­tus and Cyprus al­ready ac­cepted as mem­ber state, that the EU is to­day closer con­nected to the Gulf and the wider Mid­dle-East than ever be­fore.

But not hav­ing pri­ori­tised the GCC in the past, miss­ing a mem­ber state able to put the GCC firmly on the EU-agenda, and un­der­stand­ably be­ing con­cerned over Rus­sia and Ukraine to­day, Brus­sels, should not only pay at­ten­tion to clinch­ing a EU-US Transat­lantic Trade and In­vest­ment Part­ner­ship, but also put its en­ergy into ac­com­plish­ing deeper, in­sti­tu­tion­alised re­la­tions with the sheikhdoms on the Ara­bian-side of the Gulf

BY JO­HANN WEICK who analy­ses and teaches GCC-EU re­la­tions in Brus­sels, Bel­gium and Dubai, UAE.

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