Not surprisingly, the 28-member European Union is seeking new ways to enhance economic ties with the six-nation Gulf Cooperation Council (GCC). The measures include a grant from EU institutions to facilitate meetings and visits by prospective investors from both sides.
Among other things, the grant entails the convening of an annual forum in a GCC city that would involve investors and government officials to further develop investment opportunities in the two marketplaces.
The first such meeting is due to take place later this year in Doha, as Qatar presides over the GCC in 2015. Qatar hosted the last GCC summit late last year.
This is a major step taking into account an extraordinary decision made by the Gulf states in 2014, namely the cancellation of a high-level meeting between the two sides. The astonishing move was adopted to show their displeasure with the position assumed by EU countries at the Human Rights Council in Geneva regarding sociopolitical developments in Bahrain.
Politics and human rights aside, the EU’s latest move takes into account the GCC’s economic power. Suffice it to say that Gulf states collectively control about 37 per cent of the world’s known sovereign wealth funds. With more than $1 trillion (Dh3.67 trillion), the UAE alone accounts for 16 per cent of SWFs.
Some of EU’s member-states want to focus on improving business ties with the GCC more than anything else. According to a well-placed source, diplomats at one EU embassy in a GCC capital were instructed to concentrate their energies on bringing more investments and avoid raising human rights issues.
The GCC’s economic power in the EU can be seen at the football arena. Last week, the two opposing teams at the “Clasico” put on jerseys displaying signs of Emirates and Qatar Airways. The Real Madrid squad displayed Fly Emirates while Barcelona had on Qatar Airways. Nearly 1 billion fans around the world watched the fixture live.
Handsome deal
The Barcelona team had the tradition of displaying the motto of the United Nations Children’s Fund (Unicef) in recognition of the notable noble work of this UN body. Not long ago, this was changed to the Qatar Foundation and currently Qatar Airways in return for a handsome deal. Certainly, some Barca supporters were annoyed with the idea of dropping a charitable sign in return for a commercial contract.
The EU move has to be seen in the context of the start of a free-trade agreement (FTA) between the GCC and the European Free Trade Association. The EFTA comprises of Switzerland, Norway, Iceland and Liechtenstein. The deal was signed in 2009 but came into force in July 2014.
The GCC-EFTA deal covers trade in goods, services and government procurement. By one account, the two-way merchandise trade between EFTA and GCC has been increasing by 9 per cent in the recent past, prior to start of the FTA. It is fair to assume that bilateral ties between the EFTA and GCC should grow further, as the deal calls for unrestricted access to business opportunities in the two sides.
By contrast, prospects for clinching an FTA between the EU and GCC are nowhere close. The EU is not pleased with numerous matters including human rights and environmental protection records, besides the public procurement methods and subsidies offered in GCC countries. On their part, GCC states insist on removal of customs charges on aluminium and petrochemicals products.
Clearly, money talks when it comes to dealing with the Gulf.
The writer is a member of parliament in Bahrain
