Leaders of the Gulf Cooperation Council (GCC) yesterday approved a long-delayed joint defence agreement and agreed to work on creating a unified currency to boost the regional alliance created in 1981.

The decisions, among others, came at the end of the two-day GCC summit which also focused on strengthening economic integration among the six members, unifying the tariffs by 2005, the UAE-Iran dispute, the situation in Iraq and in the violence in the Palestinian territories.

The defence agreement is the first such in the Arab Gulf region. It will still have to be endorsed by the member states but it, in itself, is considered the summit's most important outcome, Bahrain Foreign Minister Sheikh Mohammed bin Mubarak Al Khalifa, said.

"The details will be worked out later but the Joint Defence Agreement will help boost and consolidate the existing defence arrangements and the Peninsula Shield while paving the way for better defence coordination," he said at a press conference.

The agreement says that any attack on one GCC member will be dealt with as an attack on all.The members already have the Shield forces which number 5,000 and are based in Saudi Arabia. A proposal by Bahrain, which hosts the U.S. Navy's Fifth Fleet, to raise the number to some 22,000 troops who will act as a quick deployment force, has also been adopted by the members, delegates said.

The United States is trying to sell the GCC an early warning system that could identify chemical or biological attacks. The GCC is also considering linking its armies with a communication network worth $80 million. Sheikh Mohammed ruled out scrapping existing protection agreements the GCC has with countries like the United States, Britain and France.

"The military cooperation with foreign countries is continuing and it is a cooperation in the interest of the region." He said the summit did not discuss a joint system of purchasing arms, but the issue could be discussed by the military specialists.Sheikh Mohammed also declined to name a country deemed as an enemy for the GCC and said "we are preparing our selves."

Another important development at the summit is the leaders' agreement to try and unify their currencies. Bahrain was eager to become the venue from where a unification was announced, but the summit decided to defer an agreement and no time frame for a decision was decided. But for the time being, Sheikh Mohammed said, the members agreed to use the U.S. dollar as a peg for their currencies. Kuwait, which uses a currency basket, will follow suit, delegates said.

To further their economic integration, the GCC states agreed to allow their nationals to own property, work in the civil service and be given similar treatment as the other national employees and own businesses in the member countries freely. But some professions would be limited to the nationals of each country. The final commnique did not specify them.

A common tariff is to be achieved by the year 2005 as stipulated in last year's Riyadh summit although there was talk to bring it forward by two years. Individual countries will be able to advance the implementation of the common tariff if they like, the summit decided.

Creating a common tariff, which has been bogged down by disagreement, is a must for the GCC which hopes to sign a free trade agreement with the European Union, its biggest trading partner.
On Iraq, a compromise was apparently reached between Saudi Arabia and Kuwait, who wanted a condemnation of Iraq, and Qatar and the UAE who were pushing for lifting the decade-old UN sanctions on Iraq.

The reference to Iraq was made under the heading "The situation in Iraq" rather than referring to the situation which resulted from "Iraq's invasion of Kuwait". The summit's commnique called on Baghdad to respect the sovereignty of the neighbouring states, to implement all the UN resolutions regarding arms inspection of chemical and biological weapons and to shed the aggressive attitude towards its neighbours to ensure security in the region.

Gone are the strong language against President Saddam Hussein and the calls to end to his regime. Sheikh Mohammed, who said there was a "new spirit" in dealing with Iraq said that Saddam "should ... adopt a conciliatory tone." The commnique said the members would participate in any effort to alleviate the suffering of Iraqi people. The death of thousands of Iraqis has been blamed on the sanctions.

The summit also discussed the violence in the Palestinian territories and called for end to the Israeli aggression. The GCC also reiterated its support to the refugee's right to return to their lands and for Jerusalem to become the capital of the future Palestinian state.
The next summit will be held in December in Muscat.