GCC/EU ministerial meeting in Oman stresses political dialogue, solutions for challenges

Joint meeting affirms just, overall peace in the region is vital for peace and security

Minister Bin Alawi: Discussions expressed European, Arab agreement over Palestinian issue

Trade exchange enhanced between Oman and Yemen

GCC foreign ministers this evening concluded a coordinatory meeting for the 19th GCC/Euro conference in the Omani capital Muscat.

In a statement following the meeting, Abdulrahman bin Hamad Al-Atiyyah, Secretary General of the Gulf Cooperation Council (GCC), said the meeting focused on the overall agenda of the conference, most important of which are the situation in the Middle East, Iraq, Iranian file, terrorism, sea piracy, human rights, climate change and international financial crisis.

In response to a question, he said "we encourage cooperation between private sectors of the two sides".

He said the GCC ministers also discussed ways to activate a joint cooperation agreement signed between the GCC and European sides in 1988, which covers, among other things, transfer of technology, education, scientific research, energy, industry, agriculture, fishing and standards and quality.

In this regard, Atiyyah underscored the importance of "constitutional cooperation" between the member countries of the GCC and European Union.

Atiyyah has lauded the pivotal role by the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud during the G-20 summit recently held in London.

In an interview with the Omani News Agency, highlighting the 19th GCC European Foreign Ministers conference in Muscat, Oman, Atiyyah confirmed that the role King Abdullah has played in London summit comes within the noble actions and prudent positions taken by the monarch in the service of the region's and the entire world's peoples.

Atiyyah also gave an account on the issues on the GCC/Euro agenda.

In particular, he expressed the keenness of the GCC countries to support any international effort aiming at enhancing maritime navigation in any part of the world.

He expressed belief that the GCC/European sides would spare no effort to upgrade the ceiling of cooperation in all fields to achieve common interests.

On the Gulf joint economic march, he drew the attention that the GCC member states were confidently proceeding the march for economic integration, citing the set up of the customs union and common market.

On oil market, he emphasized the keenness of the GCC states on the stability of oil market in the benefit of producers and consumers alike to achieve equilibrium between demand and supply in the oil market.

The member states of the Gulf Cooperation Council (GCC) and the European Union (EU) reaffirmed their determination to enhance political dialogue among themselves based on mutual respect and search for common solutions for common challenges which face the two regions, along with complete compliance with international resolutions, the charger of the United Nations and Security Council's relevant resolutions.

In a final communiqué following a joint meeting of their foreign ministers held in the Omani capital of Muscat, the two sides expressed satisfaction over the progress made by the GCC and EU experts council in the fields of energy, environment, climate change and the current activity aiming at supporting the public diplomacy and communication between the two regions.

They also expressed support for the special initiatives regarding clean energy technology, research and development and the exchange in higher education between the two regions.

The two sides also had positive and fruitful exchange of views on the regional political issues, particularly the situation in Iraq, Iranian file, and Palestinian affairs.

Benita Ferrero-Waldner, the EU foreign relations commissioner told reporters in Muscat that the EU is confident it can overcome disagreements over exports and sign a free trade deal with the GCC this year. The Gulf-EU free trade pact would make it easier for Gulf states to export products, such as petrochemicals, to Europe, which imposes taxes on some imports from the region. 'The stumbling block is still the export duties ...the human rights issue is just a matter of agreeing terms,' Ferrero-Waldner said.

Meanwhile, Attiyah said in an interview with Oman Tribune newspaper that the wise leadership of His Majesty Sultan Qaboos Bin Said and other GCC leaders has provided the Gulf states’ forum with the momentum to achieve the prospective integration.

The GCC chief’s observation came as a Ministry of National Economy study said trade relations between the Sultanate and the GCC states, particularly non-oil exports, have witnessed rapid growth after the last GCC summit in Qatar approved the setting up of a GCC common market and unified customs’ tariff. The trade volume touched RO659 million at the end of 2007.

Attiyah said the GCC’s Muscat Summit will discuss several important issues including the Monetary Union and setting up of a Monetary Council in preparation of establishing the Gulf Central Bank. Regional, Arab and international developments which are of interest to the GCC countries will also figure at the talks.

“Although we have to do more to achieve the aspirations of the GCC nationals, many of the decisions taken at the previous summits have been implemented in the fields of economy, business, security and trade. Such steps include the Custom Union, Gulf Common Market and the Monetary Union which will be approved in Muscat. Many integration efforts such as the electrical, hydro and railway project have been proved feasible”, he added.

“The last summit in Riyadh approved initiating a nuclear program for peaceful purposes. The initial studies for the program have already been completed and work is under way in collaboration with the IAEA to undertake detailed studies, the GCC chief said.

As for the expansion of the GCC member states, Attiyah said that while there is no intention to expand the GCC at the moment, “we have real partnership and strategic cooperation with Yemen who is already a member of a number of organizations working under the GCC umbrella”.

In response to a question on the GCC member states’ stance on Iran’s nuclear program, Attiyah said: ‘We have joint interest and good relations with Iran. What we care for at the moment is to maintain stability in the region and not to be involved in something that distracts us from focusing on the development process in the GCC states.”

“We are also very keen to solve the issue of the disputed three islands between UAE and Iran. We also back a peaceful settlement of the Iranian nuclear issue through diplomatic talks and negotiations”, he added.

As for the impact of the global financial crisis on the GCC countries, Attiyah said that while GCC economies are closely linked to global economy, the GCC countries will try to overcome the crisis with the least possible losses and benefit from the surpluses that have accumulated in the last few years. The sound and conservative financial measures taken by the GCC central banks will help the GCC countries withstand the impact of the crisis.

On the negotiations with the European Union on the Free Trade Agreement with GCC countries, Attiyah said, “Although we hoped to finalize the agreement before the end of 2008, we found that the European side is raising issues that are not at all connected to trade. We have shown great patience with the European side and we finally were left with no other option but to suspend the talks.”

Meanwhile, the Ministry of National Economy said the trade between the Sultanate and the GCC has been growing at a fast pace over the years. Non-oil exports to the GCC has grown from RO143 million in 2001 (6.5 per cent) to RO659 million in 2007 with 55.5 per cent year on year growth, according to a study conducted by the Ministry of National Economy.

Exports from the Sultanate have been on an upswing since 2003. In 2001, while the non-oil exports to the GCC amounted to RO143 million, re-exports were to the tune of RO280 million. In 2007, non-oil exports and re-exports to the GCC countries amounted to RO659 million and RO699 million respectively.

Imports from the GCC countries to the Sultanate have also registered high growth since 2004 when it touched 64.9 per cent and 19.8 per cent and 44.2 per cent respectively in 2006 and 2007. This high growth means that the imports from the GCC countries have more than doubled from RO740 million in 2001 to RO1.854 million in 2007. Non-oil exports from Oman to the GCC nations in 2007 came from 309 products with a minimum value of RO10.000. Seventy-four per cent of non-oil export to the GCC was from 20 of the 309 products, while 46 per cent from three products including lubricating oil for spark-ignition engines (gasoline) and other liquefied petroleum gases.

The UAE is the major trading partner of the Sultanate amongst the GCC countries and also amongst the whole world with the exception of crude oil exports to China.

Seventy-nine per cent of the Sultanate’s non-oil exports to the GCC countries went to the UAE in 2007. Saudi Arabia was the next largest export market in the GCC for the Sultanate with 9 per cent.

The RO1.854 million worth of imports from the GCC countries in 2007 came from 3,137 products. Sixty-two of these commodities with a value of RO5 million or more made up 48 per cent of all imports from the GCC in 2007.

Intra-GCC trade accounted for 30 per cent of total imports and 51 per cent of non oil exports in 2007. This is higher than the other GCC countries barring Saudi Arabia, which had a higher share of its non-oil exports going to GCC markets but their share of total imports from the GCC was amongst the lowest. Intra-GCC trade represented 5.1 per cent of the region’s total trade with the world in 2007. It represented 8.2 per cent of total imports and 7.8 per cent of total exports in 2007. If oil is excluded, intra-GCC trade’s share of trade is slightly higher at 9 per cent of total trade – 15 per cent of imports and 26 per cent of exports in 2007.

The major intra-Gulf exporters in 2007 were Saudi Arabia with an estimated 44 per cent of all exports to the GCC followed by the UAE with an estimated 38 per cent of all exports to the GCC. Together these two GCC countries accounted for 82 per cent of all exports to the GCC. The remaining 17 per cent of intra GCC exports in 2007 came from Oman (7 per cent) followed by Qatar, Kuwait and Bahrain.

However, a different picture emerges when looking at the pattern of intra-Gulf imports in 2007 with no single country dominating. Three countries had a 68 per cent share (Kuwait, which imported 28 per cent of all imports from GCC countries; Oman 20 per cent and UAE 20 per cent. Saudi Arabia and Qatar import 16 per cent and 12 per cent respectively, while Bahrain imports 4 per cent of all imports from GCC countries. The distribution of intra-Gulf export and import trade in 2007 is similar to that of other years.

The Sultanate is a significant participant in intra-Gulf trade of commodities importing 20 per cent of intra-GCC imports and exporting 7 per cent of intra-Gulf exports.

The proportion of total imports coming from GCC countries has increased from 7.7 per cent in 2000 to 8.2 per cent in 2007. There is a larger increase when focusing on non-oil exports, which grew from 21 per cent of all non-oil exports to GCC members in 2004 to an estimated 26 per cent in 2007. This could be, in part, due to the introduction of the GCC Customs Union in 2003, designed to increase the level of intra-GCC trade.

The GCC is more important to each of the member states as an export market than a source of imports. Fifty-one per cent of Oman’s non-oil exports went to the GCC states but 30 per cent of its imports came from them in 2007. In the same year, 41 per cent of Bahrain’s non-oil exports went to the GCC states. GCC states are importing from the world but their exports are focused more on the GCC region.

The GCC region represents a significant global trading block with the level of total trade in and out of the region reaching approximately $874 billion in 2007. The trade value has grown in current prices to approximately 27.9 per cent annually between 2003 and 2007.

The GCC states have been going through a period of economic boom that is expected to bring their combined GDP in nominal terms to $1,151 billion in 2008, according to the IMF’s World Economic Outlook Database (October 2008). This is 2.8 times larger than their GDP in 2003 with an average growth rate over the intervening 5 years of 23.1 per cent per annum. This rate of economic growth has propelled the GCC economy to rise up in the world rankings from 17th largest economy in 2003 to 13th largest economy in the world in 2008.

The GCC countries are becoming a global trading block through strong growth in the value of its total trade at 27.9 per cent annually from 2003 to 2007, largely due to oil but also to its growing import requirement.

Intra-GCC trade has also been growing rapidly at 32.4 per cent over the same period, although it retains a minority share of its total trade. The significance of intra-GCC trade varies among member states. Intra-GCC trade has the highest significance for the Oman, representing 30 per cent of all imports and 51 per cent of all non-oil exports. The Sultanate is also a significant source of certain key commodities to its GCC partner countries and also a significant market for exporters in other GCC countries.

HE Yousuf Bin Alawi Bin Abdullah, Minister Responsible for Foreign Affairs, received Markos Kyprianoy, Cyprus Minister of Foreign Affairs, Jean Asselborn, Deputy Prime Minister, Minister of Foreign Affairs and Immigration of Luxemburg, Benita Ferrero-Waldner, EU External Affairs Commissioner, and Frans Timmermans, Minister of European Affairs, outside of the Netherlands on the sidelines of the 19th GCC-EU Joint Ministerial Meeting hosted in the Sultanate at Al Bustan Palace Hotel on Wednesday.

The meeting discussed cordial relations between the Sultanate and their countries in various fields and ways of enhancing them, besides sharing views on the regional and international issues of concern.

The meeting was attended by HE Salim Bin Abdullah Bin Burham Ba’ Omar, Head of East European Department, and delegations accompanying the ministers taking part in the meeting.