GCC-EU partnership to grow under new Brussels leadership
The EU will change leadership in a few weeks following political changes in member states and the composition of the European Parliament. How will this affect the EU’s relations with the Gulf Cooperation Council (GCC) and its member states? While the GCC-EU relationship has always been important to both sides, it has gone through some difficult times recently over the EU’s approach to Iran. Will that change under the new leadership?
GCC-EU relations started from the time the GCC was founded in 1981. It became one of the most important links as the GCC sought to model itself after the older organization. The stages of its economic integration, for example, followed the EU model, starting with a free trade agreement in 1983, followed by a customs union in 2003 and common market in 2008.
The strong institutional links were solidified by a cooperation agreement and the establishment of the GCC-EU Joint Ministerial Council, which met annually, attended by foreign ministers from the 34 states, in addition to hundreds of activities at other levels that covered almost every issue.
Over the past 38 years, the EU as a group remained the GCC’s No. 1 trading partner. Last year, the two-way trade in goods reached a total of about $170 billion. Gradually, however, GCC trade with the EU has declined as a share of overall GCC external trade, going down from more than 25 percent in 1981 to about 11 percent last year. If current trends continue, China will soon replace the EU as the top GCC trading partner. But GCC-EU trade will remain important for both sides as they try to conclude a free trade agreement and other arrangements to facilitate trade and promote investment.
There were important differences of opinion on trade and political issues, of course, but the relationship remained solid until the EU became the focal point in the nuclear deal negotiations with Iran. In those talks, the EU sidelined the GCC. Despite extensive discussions over the years — during GCC-EU Joint Ministerial Council meetings and elsewhere — about Iran’s destabilizing activities in the region and its support for terrorism, the EU overlooked those concerns in its pursuit of a deal and potential economic benefits for European companies in Iran.
The new EU leadership will take office on Nov. 1 and is expected to revisit EU policies in some important areas, including its foreign policy and the relationship with the Gulf region.
The need to recalibrate relations with Iran is dictated by several factors that the new leadership will likely take into account. For one thing, the nuclear deal has failed, as the US withdrew and Iran has repeatedly breached it. The US’ sanctions on Iran frustrated EU efforts to take advantage of the flawed deal economically, despite the adoption of schemes to circumvent the sanctions. European companies have mostly left Iran for fear of being snared by the US sanctions and of losing their places in the American market.
Iran has not helped. Not only did it breach the deal after it had ratified it, but it took the deal as a virtual license to increase its malign activities in the region, from Syria and Iraq to Yemen and Lebanon. This year, Iran has escalated its attacks on international shipping in the Gulf and increased the scope and severity of its attacks on Saudi Arabia, directly or through proxies, culminating in the brazen attacks of Sept. 14 on some of the Kingdom’s most important facilities, which provide oil to hundreds of millions of people around the world.
Iran’s support for the Assad regime in Syria produced Europe’s worst refugee crisis in decades, challenging the EU’s efforts to uphold its founding values and undermining political arrangements in a number of member states, which witnessed a rise in racism, xenophobia and support for extremist right-wing groups.
Trade and investment also matter. The EU was losing the competition with China, South Korea and other Asian powers in part because it was losing its privileged position in the GCC market, while Asian nations were gaining ground. The ambitious economic diversification plans adopted by GCC countries are opening up great opportunities for investment and trade, which EU member states have been losing out on to their Asian competitors. They need to get in on the action before it is too late.
The new EU leadership will take office on Nov. 1 and is expected to revisit EU policies in some important areas.
Abdel Aziz Aluwaisheg
The key relevant actors in the EU who take office in November include the bloc’s new top diplomat. Spanish Foreign Minister Josep Borrell will become the EU’s high representative for foreign affairs and security policy and vice president of the European Commission. He is quite familiar with the GCC region and Spain has traditionally played a positive role in bringing the two blocs together. Phil Hogan, the incoming trade commissioner, is also familiar with the GCC as he has served, since 2014, as the EU commissioner for agriculture and rural development. He has previously stressed the need for greater trade with and investment in the Gulf. His appointment is expected to encourage current efforts to revive the free trade agreement negotiations, which have stalled since 2008.
One of the most important changes in EU leadership is the appointment of Ursula von der Leyen as president of the European Commission — the top post in the EU bureaucracy. She has served as Germany’s defense minister and supported the idea of an EU army. While she will probably not push the latter idea, she is nevertheless planning to further develop the EU’s defense capabilities. She is planning to create a new entity, led by France’s Sylvie Goulard, with the aim of harmonizing the development of weapons and defense systems in the EU.
This change will create new opportunities for GCC-EU cooperation, as the GCC has, from its inception, boasted a significant military pillar, which culminated in November 2018 with the appointment of the first ever GCC joint military command.
Thus, in many respects, the impending changes in the EU leadership will likely lead to stronger GCC-EU engagement on political, security and trade issues.
- Abdel Aziz Aluwaisheg is the GCC Assistant Secretary-General for Political Affairs and Negotiation, and a columnist for Arab News. The views expressed in this piece are personal and do not necessarily represent GCC views. Twitter: @abuhamad1