GCC Urged to End Customs Rifts Ahead of Summit

Gulf oil producers should step up efforts to end rifts blocking the full implementation of their landmark customs union ahead of their annual summit in Abu Dhabi late this year, a semi-official study has said.

A surge in trade within the six Gulf Cooperation Council (GCC) nations by more than five times to a record high of $91 billion in 2009 should motivate them to iron out their differences and push ahead with the project on time, said the study by the government-controlled Emirates Industrial BankEmirates Industrial BankLoading... (EIBEIBLoading...).

Its figures showed inter-GCC trade recorded a staggering annual growth of around 72 per cent to leap from nearly $15 billion in 2002 to $91 billion in 2009.

Their only agreement was to extend a deadline for a few more years for a final agreement on that issue before fully implementing the customs union.

The talks are the latest in a series of meetings by the six members seeking to put the customs union on track after launching a common market in early 2008 and to support plans by four GCC nations to launch a monetary union in 2010.

GCC states--the UAE, Kuwait, Saudi Arabia, Qatar, Bahrain and Oman--launched the long-awaited customs union at the start of 2003 and set a transitional period of three years for the full enforcement of the project.

But rifts over tax revenue, border delays and other issues have blocked the implementation of the customs union, forcing the six members to extend the transitional period until the start of 2008 to coincide with the common market.

In 2009, the GCC finance ministries said they had charged a consultancy firm with preparing a study on the best way for customs revenue distribution.

The accusations traded between the Shura, the GAB and other government institutions coincided with moves by Saudi Arabia to promote itself as one of the world's best and safest investment destinations within a long term diversification programme intended to reduce its reliance on unpredictable oil sales.

Other GCC members--Kuwait, Qatar, Bahrain and Oman--have also announced the creation of relevant bodies and legislation to eliminate corruption.
Until recently, publicised official enquiries about misappropriation of funds and corruption cases have been a taboo in most Arab countries.

The policy turnaround followed intensifying moves, mainly by Gulf nations, to open up their economies, attract foreign investment and remove red tape, corruption and other malpractices for a better standing in the mushrooming global indices that measure nations' progress.

Such measures have allied with other procedures to tear down capital barriers to turn Saudi Arabia into the top destination of foreign direct investment in the Arab world, followed by the UAE.
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