GULF STATES SIGN PACT WITH SOUTH KOREA FOR FREE TRADE
▶ ‘Historic step’ towards stronger economic relations, GCC chief says
The GCC has signed a free trade agreement with South Korea to boost trade and economic ties between the six-member bloc and the East Asian country.
This is the second such trade deal signed by the Gulf states in recent months following an agreement with Pakistan in September, the GCC secretary general Jasem Al Budaiwi said.
The agreement is a “historic step towards achieving Gulf economic integration and towards strengthening economic and trade relations between the two sides”, Mr Al Budaiwi said.
The pact includes trade in goods and services, government procurement, digital trade, co-operation in the areas of small and medium enterprises, customs procedures and intellectual property.
The agreement is expected to boost the volume of trade and increase commercial exchange in goods and services between the two sides and diversify their economies.
“The signing of free trade agreements with both Pakistan and South Korea, within a period of three months … takes into account the wonderful economic position that the GCC countries have reached,” Mr Al Budaiwi said.
The deal with South Korea came as a result of negotiations, “which reflected the real common desire to strengthen the strategic partnership and economic co-operation between the two sides”, he added.
Economies in the GCC have recovered from the coronavirus pandemic on growth in their oil and non-oil sectors, with the growth momentum set to pick up pace in the next two years amid diversification efforts.
The region is projected to expand by 1 per cent in 2023 before rebounding to 3.6 per cent and 3.7 per cent in 2024 and 2025, respectively, the World Bank said last month.
As part of their diversification efforts, countries in the region are signing new trade and economic deals globally.
The UAE, the Arab world’s second-largest economy, is pursuing a target of Dh4 trillion ($1.09 trillion) in foreign trade by 2031 as part of its diversification strategy. It also aims to double the size of its economy by 2030.
The UAE’s non-oil foreign trade hit a record Dh1.24 trillion in the first half of the year, up 14.4 per cent annually.
It is working towards signing 26 Comprehensive Economic Partnership Agreements as it seeks to attract more investment. It has signed deals with India, Israel, Turkey, Indonesia, Cambodia and Georgia. The first four agreements are already in effect.
The UAE is South Korea’s second-largest Arab trade partner, with bilateral non-oil trade in the first half of the year reaching $3 billion, similar to the first half of 2022, state news agency Wam reported.
South Korea’s President Yoon Suk Yeol visited the UAE in January and the two countries signed new deals on hydrogen, crude oil storage, water resources, space exploration and transport. The two countries have also held talks to promote entrepreneurship and support the growth of SMEs.
Saudi Arabia is also strengthening international economic ties and, this month, signed agreements worth more than $25 billion with China.
A Gulf-China FTA received fresh impetus early this year after China’s Foreign Minister Qin Gang called for it to be finalised “as soon as possible”. Meanwhile, the latest round of talks between the UK and the GCC has made “good progress” towards the creation of an FTA, the British government said last month.