Despite the many difficulties the US and the EU had in ironing out a free trade pact, it is clear that a final agreement has been reached. Not only will this have an impact on either side of the Atlantic but just as well on the economic and trade ties with countries elsewhere.

The US and the EU together constitute 45 per cent of the global economy and one-third of international trade. Among the various positives, the agreement is expected to boost the kind of growth sought by both parties and create hundreds of thousands of new jobs, particularly given that it will not only remove customs tariffs, as is the case in such agreements, but also include the liberalisation of trade in the services sector.

This is a major step forward given that trade liberalisation within the member states of the World Trade Organisation following the Doha Round has been at a standstill over several years.

Since a US-EU free trade agreement could lead to seismic changes in international trade patterns, it is essential that other countries strive to rearrange their economic and commercial engagements, including signing more free trade agreements, particularly with the US, the EU, China, India, Turkey, Brazil and Russia.

They also need to complete the implementation of agreements within each bloc, such as the ones signed between the GCC countries. The GCC’s free trade agreement and customs union is confined to the liberalisation of trade in goods only, while trade in services and the free flow of investment capital are still facing difficulties and complicated administrative procedures.

Certainly, agreements of this size and importance will face many difficulties and conflicts of interest. But overcoming them and reaching consensus and compromises are always possible. Yet, it is important for all parties to set specific timetables for the negotiation process and implementation.

For example, the current attempt by the US and the EU to establish the free trade agreement faced many difficulties and some of which still exist. This is because there are disparities concerning agriculture and subsidies provided to this vital sector, as well as on the issue of environmental protection and genetically-modified foods, which are rejected by the EU. Also, some Europeans think that the free trade agreement will grant US multinationals certain privileges.

In contrast, some US lobbies have come out against certain European demands, such as restrictions on service providers and on some types of US goods that do not conform to European standards.

There is divergence in views from time to time, but concessions are made by both parties to achieve strategic gains as well as to be better equipped to strengthen their positions in trade and international relations. This requires co-operation with other parties and within coalitions.

The conclusion is that the world stands at the footsteps of radical change in economic and trade matters. This in turn requires a readiness to push for strengthened regional integration within individual blocs. In other words, this calls for a full implementation of economic agreements between the GCC states and the strengthening and diversification of alliances with other rising economic powers.

— Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.