Saudi Arabia was responsible for almost half of the total surplus ($245 billion) followed by the UAE ($94 billion) and Qatar ($79 billion).
QNB Group's analysis shows that Japan has been the region's main trade partner for decades, purchasing 16 percent of its exports and supplying 6 percent of GCC imports in 2010, according to IMF data. South Korea is also a long-standing leading trade partner, taking 10 percent of exports and supplying 4 percent of imports. These two countries are by far the main contributors to the GCC trade surplus as their exports from the GCC far exceed the imports they supply. Half of the GCC trade surplus in 2010 was a result of trade with these two countries.
Recently, trade between the GCC and other Asian countries has risen rapidly. In 2001, barely 2 percent of GCC trade was with India, by 2010 that had risen to 11 percent, only slightly behind Japan. Similarly, Chinese trade with the GCC expanded from just 4 percent of the GCC total to 10 percent in 2001-10. As India and China are the first and second largest suppliers of imports to the GCC, this partly offsets their purchases of GCC hydrocarbon exports.
The growing trade ties with Asia's two giants are not surprising. Their demand for hydrocarbons has been growing rapidly and, with limited domestic reserves, they rely on supplies from the GCC. Similarly, China and India have pursued export-led growth strategies. They have been producing and competitively-pricing goods needed in the GCC such as electrical items, textiles and construction materials.
India's slight edge over China may be related to its geographical proximity to the Gulf and to the large population of Indian migrant workers in the GCC, who purchase goods from their home country. In fact, India was both the fastest growing import source and export destination for the GCC in 2006-10, with annual growth of 27 percent and 55 percent respectively.
Despite the growing share of trade with Asia, Western trade partners remain important for the GCC, with the EU and US collectively representing about a fifth of GCC trade in 2010.
The EU countries differ from the GCC's other major trade partners in that they supply more goods than they purchase. This is because they mainly source their hydrocarbons from Russia and Africa, while the GCC imports large quantities of capital and luxury goods from the EU, ranging from German cranes to Italian handbags. As a result, trade with the EU reduces the overall GCC trade surplus by about 18 percent.
Trade with the rest of the MENA region is relatively small, equal to about 6 percent of total GCC trade and skewed towards exports. However, it has doubled in importance since 2001 when it was just 3 percent. If the rest of the MENA region was a country, it would be the GCC's sixth largest trade partner after the US. Intra-GCC trade, meanwhile, is equal to about 6 percent of the region's external trade.
QNB Group forecasts that the GCC's trade surplus will average around $493 billion in 2012-13, slightly below their 2011 levels, as oil prices remain high, offset by import growth at around 3.5 percent.
Among the likely changes in trade flows compared to 2010 is that Japan's share of exports from the GCC will rise even further, as it imports more hydrocarbons as a result of the closure of nuclear power stations. Meanwhile, Chinese imports are expected to continue to grow in importance, and so the GCC may post net trade deficits with China.
