DUBAI: Gulf Arab oil producers are likely to finalize this year a list of goods on which they can collect more than the agreed 5-percent duty under their regional customs union agreement, a United Arab Emirates official said yesterday.
The six Gulf Cooperation Council (GCC) countries, including Saudi Arabia, introduced a customs union in 2003 as one preparatory step toward the formation of a regional common market.
But many of them still levy duties of more than the unified 5 percent on imports of some goods in order to protect local industries, said Saeed Khalifa Al-Marri, deputy director general of the UAE Federal Customs Authority.
This is one of the key hurdles to implementing the regional customs union by the end of 2008, Al-Marri said. “The protection fees that some countries collect are one of the main issues behind the delay,” Al-Marri told Reuters.
Saudi Arabia, for instance, charges more than 5 percent on about 400 imported goods, he said. “The idea is to make a unified list of protected goods,” Al-Marri said. “Each country has its own industries it wants to protect (and) that should be complete by the end of the year.” At a meeting in Riyadh last week, the GCC customs union committee drafted a recommendation to Gulf finance ministers to speed up the completion of the unified customs list before 2009. The ministers will study the proposal at a meeting this month, and likely forward their recommendations to the GCC industrial committee, he added.
Implementation of the customs union, which initially envisaged a three-year transition period, has been fraught with hurdles as Gulf customs authorities struggle to raise awareness of the rules among traders.
The main feature of the union was the introduction of a 5 percent tariff charged at the first Gulf port of entry, after which the goods can move freely through the region.