GCC states to join Kyoto Customs Convention

Muscat: GCC finance and foreign ministers have decided to join the Kyoto Customs Convention according to a senior GCC Secretariat official - five years after the six-member oil producing countries launched a customs union to streamline the flow of goods across the region as part of their economic integration plan.

Shaikh Abdullah Bin Zayed Al Nahyan, UAE Foreign Minister, arrived in Muscat earlier in the day to attend the event. The meeting was going on while the paper was going to press last night.

The GCC countries are racing against time to create a monetary union by 2010, following the creation of a common market that in theory came into being last January 1.

"The GCC ministers have decided to join Kyoto Customs Convention in their own capacity as countries but they will all join together and not as a GCC bloc," Mohammad Al Mazarouhi, Assistant Secretary General for Econ-omics at the GCC Secretariat, told Gulf News on Tuesday at the end of the GCC Finance and Economic Ministers meeting at the Al Bustan Palace Hotel.

He added that the meeting also discussed the hurdles facing the customs union and ministers have suggested solutions to these barriers. The ministers also discussed a draft for monetary union, then the FTA (Free Trade Agreement) with the European Union was also discussed. A lot of efforts were made during the discussion to overcome three main issues still pending, to seal the agreement with the EU.

The GCC finance and economic ministers were also meeting in Oman, as a preparatory session for the 29th GCC Summit to be held in Oman next month.

Meanwhile, Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, chaired the fifth meeting of the UAE economic coordination and cooperation committee in his office yesterday.

The meeting was attended by local economic department heads, UAE Central Bank and Ministry of Labour representatives.

Matters discussed included the unified commercial registry, draft laws worked by the MoE as well as initiatives aiming at stabilising market prices and the final draft of the companies law.

GCC advantages muted

The GCC currency union that is planned for 2010 is unlikely to affect government bond ratings of its six member states, credit rating agency Moody's said on Tuesday.

Many of the common advantages of a currency union are muted in the case of the GCC, the disadvantages are also less applicable given that GCC states already have fixed exchange rate pegs.

The stimulus to trade from the adoption of a common currency would be more limited than has been the case with other currency unions, for two main reasons.

"Firstly, there is already very little exchange rate risk within the GCC as all six member states have pegged exchange rates. Secondly, there is less potential for trade within the GCC than in other currency unions because of a lack of economic diversification," explains Tristan Cooper, Moody's vice-president/senior analyst and author of the report.