RIYADH, 13 October — Finance ministers of Gulf Cooperation Council states finalized here yesterday procedures for the launch of the long-awaited GCC customs union in January, 2003. “There was total agreement among the ministers on all issues discussed, mainly the launch of the customs union,” GCC Secretary-General Abdul Rahman Al-Attiya said at the end of the one-day meeting which also discussed a proposed monetary union.
“All obstacles have been sorted out and the launch will be on Jan.1, 2003 as approved in December by the GCC leaders,” Attiya told reporters.
Among the measures approved by the ministers was a mechanism for the payment of customs revenues and a computer linkup between the points of entry and exit of GCC states.
GCC finance ministers in June agreed to distribute customs revenues on the basis of the final destination of imports. The customs union, advanced by the GCC states from 2005 to 2003, is seen as an essential step on the way to forming a Gulf common market.
The difference, of four percent minimum and 20 percent maximum in terms of customs levy in the past, has hampered plans for a GCC common market. A final plan, once implemented, would help GCC to become a significant consumer bloc in the world with more than $90 billion in annual imports. This will also facilitate trade with the Gulf states, which hold 50 percent of the world's proven oil reserves with a combined output of around 13 million bpd.
Omani Minister of National Economy Ahmed Makki, whose country holds the rotating presidency of the GCC, said in his opening speech that the custom union will be implemented for an initial period of three years during which it will be evaluated for possible changes.
The minister said that the “transformation of the GCC from a free-trade area to a full customs union is an ambitious undertaking, which is now finalized after several years of deliberations".
The ministers also approved a timetable for monetary union planned for 2005 and a single currency in 2010, Attiya said. They approved a recommendation made on Tuesday by GCC central bank governors to set up a specialized department at the secretariat general to oversee moves to adopt the monetary union and single currency.
A recommendation by the governors to ask the European Central Bank to study requirements for the monetary union was also approved.
GCC officials said that the launch of Euro is a good example of what the GCC can expect if they adopt a common currency.
Earlier, the Gulf states had approved the US dollar as a yardstick for a single currency to be effective from 2010. But the Kuwaiti dinar, pegged to a basket of currencies, mainly the US dollar, was given a margin of movement against the dollar.
Yesterday’s meeting also reviewed a report on WTO and a plan to set up Arab commercial exchanges.
