MUSCAT, 1 January — Leaders of the six-nation Gulf Cooperation Council (GCC) yesterday took a major step toward economic union and signed an agreement based on joint customs tariffs in 2003 and a single market and currency by 2010. The Gulf states also decided to increase their joint defense force to 20,000 men and strongly condemned terrorism in the aftermath of the Sept. 11 attacks in the United States.
One after the other the leaders or representatives of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates signed the document in the televised closing session of a two-day summit in the Omani capital.
The customs accord, unifying tariffs at five percent, will come into force on Jan. 1, 2003, according to a final statement from the group’s annual year-end meeting. The new currency will be launched by Jan. 1, 2010 "at the latest," said the summit’s final communique read by GCC Secretary-General Jamil Al-Hujeilan.
The Gulf Arab leaders also agreed to set up a supreme defense council and to boost their joint forces to 20,000 men. They gave no details about that decision, but a delegate told reporters the council would oversee the implementation of a joint defense pact, signed by the leaders a year ago, which commits the GCC countries to defend any member state against an outside threat.
The council will meet once a year at the level of defense ministers and can be convened in case of emergency for joint sessions with foreign ministers, he said.
The body, backed by a high committee made up of chiefs of staff and military technical committees, will be chaired by the country holding the rotating presidency of the GCC. The GCC has since 1986 had a joint defense force of 5,000 men stationed at Hafr Al-Batin in northeastern Saudi Arabia, near the border with Iraq. Plans have long been made to bolster the number of men.
"This force will be developed into a mechanized infantry brigade of 20,000 men," a senior GCC military official said.
The GCC leaders offered total support to the US-led international coalition and the "anti-terror war" launched by Washington which has toppled Afghanistan’s Taleban regime and is pursuing Osama Bin Laden’s Al-Qaeda network suspected in the hijacked jetliner attacks on New York and Washington.
They again condemned the attacks and "expressed total readiness to cooperate with the international community." But they simultaneously called for an international summit "to define the international basis for the struggle against terrorism" and urged the world "not to hold Islam responsible" for the attacks in the United States.
Meanwhile, Crown Prince Abdullah, deputy premier and commander of the National Guard, arrived in Riyadh from Muscat last evening. He also visited President Sheikh Zayed ibn Sultan Al-Nahayan of the United Arab Emirates in Abu Dhabi yesterday.
The Gulf leaders also offered to allow impoverished Yemen to join some GCC agencies in a first step to full membership of their oil-rich group. Their statement said Yemen would be allowed to join the Gulf council of health ministers, the regional education bureau and the council of labor and social affairs ministers. Sanaa could also send a football team to the Gulf Cup. "Other cooperation measures, notably economic, will follow," it said.
Yemen, one of the poorest countries in the Arab world, is a small oil producer. Its GCC neighbors command nearly half of the world’s crude reserves. Sanaa has said it qualified to join because of its geographic location and its historical ties with the GCC.
The Gulf leaders called on Iraq and the United Nations to resume their dialogue in order to achieve a lifting of the embargo slapped on Baghdad in 1990 for invading Kuwait. "The GCC calls on Iraq and the UN secretary-general (Kofi Annan) to resume their dialogue and cooperation in line with the principles on which the Security Council will base a decision to lift economic sanctions," the summit statement said.
The six-nation alliance strongly rejected Iran’s occupation of three small but strategic Gulf islands, saying "the invalid claims and measures taken by Iran (to continue) the occupation of the islands" would "not change in any way the United Arab Emirates’ rights over these islands." The Gulf leaders also blamed Israel for the escalation of violence with the Palestinians and voiced full support for Palestinian leader Yasser Arafat.
The customs union deal paves the way for a free trade pact with the European Union, the region’s main trading partner. Gulf officials have accused the EU of foot-dragging over free trade, saying the GCC had fulfilled its requirements to reach a deal streamlining trade worth about $46 billion. They warned they may reconsider the pact if no progress is made in talks on the deal — hampered by EU demands for GCC common tariffs and by protectionist EU policies.
"Now there are no more excuses for them to postpone signing the free trade zone (agreement) between the two blocs," the GCC envoy to the European Union, Najeeb Al-Rawas, told reporters. A main dispute is over a six percent EU duty on primary aluminum Gulf exports. Two aluminum smelters in Bahrain and the UAE produce more than a million tons per year, about five percent of the world’s total.
The communique said GCC states must peg local currencies to the US dollar by the end of 2002 and forge relevant economic standards by 2005 to prepare for the launch of a unified currency. Currencies of all GCC states, with the exception of Kuwait, are pegged to the US dollar, in which their main crude oil export is traded. Kuwait’s dinar is currently linked to a basket of currencies, whose components are a state secret.
