KUWAIT CITY, 11 May 2004 — Gulf Arab states will sign a landmark economic cooperation agreement with China at the end of the month to boost trade relations and pave the way toward a free trade accord, the head of the Gulf Cooperation Council told AFP yesterday.
Finance ministers of the six-nation alliance will visit Beijing from May 30 to June 2 to ink the agreement. “We pin great hopes on this agreement to open negotiations for further deals and finally strike a free trade accord. China is a huge promising market,” said GCC Secretary-General Abdul Rahman Attiya.
“The economic cooperation agreement is a framework for further deals with China. It will shape future economic and political relations between Gulf Arabs and Beijing,” Attiya said.
Following the signing, a timetable will be set for deeper trade negotiations with the Asian giant, capitalizing on the strong political relations that exist between Gulf Arab states and China, he added.
The China trip was confirmed at a GCC finance ministers meeting held in Kuwait on Saturday, said Adnan Khudair, director of Gulf and Arab Economic Cooperation at Kuwait’s Finance Ministry.
GCC states are spreading their wings, having taken a number of key economic integration measures, including the launching in January last year of a customs union that enabled the alliance to open trade negotiations as a single bloc with the rest of the world.
The GCC, which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has announced a monetary union for 2005, a common market by 2007 and a single currency by the start of 2010. China is the fourth largest trading partner with GCC nations after the European Union, Japan and the United States.
Trading volumes between the two sides have mushroomed in recent years, with imports-exports climbing 46 percent to $16.9 billion in 2003 over the previous year’s $11.57 billion. But this represents a mere two percent of China’s trade with the world and just under five percent of the GCC’s combined domestic and international exchanges, according to official figures.
Chinese exports to GCC states last year, which included electronics, various types of goods and garments, topped $8.09 billion, an increase of 45.7 percent over 2002 figures. It represented only 1.8 percent of China’s exports.
GCC exports to China, mostly oil and petrochemicals, hit $8.81 billion in 2003, rising by 46.3 percent over the previous year. Most of the rise in GCC exports was attributed to an increase in China’s oil imports from the Gulf nations, coupled with a hike in crude prices.
In a quest to open new markets for oil, petrochemicals and aluminum products, the GCC states signed a framework economic cooperation agreement with the European Union in 1998, and inked free trade agreements with several Arab nations.
But the GCC has so far failed to sign an elusive free trade agreement with the EU. Kuwait’s Finance Minister Mahmoud Al-Nuri on Saturday said he hoped the pact will be signed before November this year after some progress was made in talks held in April.
Attiya also said that the GCC foreign ministers will visit Brussels next week to meet European Union officials in a new push for a long-stalled free trade accord.