Signing free trade agreements is one of the things that the Persian Gulf Cooperation Council has put on its agenda for several years in line with economic development. Although the countries of the West Asia and North Africa region had a slower pace in the integration process both regionally and internationally compared to other regions of the world, it seems that the members of the Persian Gulf Cooperation Council intend to change this process.
The first free trade agreement of the Persian Gulf Cooperation Council was signed with Singapore. On December 15, 2008 in Doha, the parties signed a free trade agreement known as GSFTA. This document is a comprehensive agreement and includes trade in goods, rules of origin, customs procedures, trade in services and government procurement. Among the sectors of the member countries of the Council that benefit from this agreement, we can mention petrochemical, jewelry, machinery and industries related to iron and steel. The GSFTA is based on the commitments of Singapore and the GCC countries at the multilateral level, especially the General Agreement on Trade in Services (GATS) of the World Trade Organization (GATS), but in this agreement, the parties have committed to expand various sectors of services beyond their commitments in the World Trade Organization.
A year after this agreement, the Persian Gulf Cooperation Council signed a free trade agreement with the European Union as a result of its negotiations with the European Union. The agreement was signed on June 22, 2009 in Hamar, Norway and contains 93 articles and 16 annexes, covering a wide range of areas including trade in goods, trade in services, government procurement, intellectual property rights, dispute management and settlement, and competition. It should be noted that the process of signing this agreement started in the 90s and the beginning of the financial crisis in 2008 accelerated the process of signing it. After a hiatus of several years, this time Britain entered into negotiations with the Persian Gulf Cooperation Council to sign a free trade agreement. The first round of negotiations for a free trade agreement between the UK and the GCC took place between August 22 and September 29, 2022, and was conducted virtually. More than 100 British negotiators participated in this round of negotiations. The agreement is expected to boost trade between the GCC and the UK by 16% in the long term, add at least £1.6bn a year to the UK economy and contribute £600m or more to UK workers’ annual wages.
The latest free trade agreement of the Persian Gulf Cooperation Council was concluded with Pakistan. The GCC and Pakistan concluded the final round of negotiations on a free trade agreement with each other under the title (PAK-GCC FTA) in Riyadh. This agreement is a turning point in the economic cooperation of both sides. The beginning of these negotiations dates back to 2004, but only a few rounds of negotiations took place between the parties at that time, and negotiations were resumed in 2021. One of the main motivations of Pakistan for signing this agreement is the issue of direct investment and it also intends to increase its competitiveness compared to India and Bangladesh with this agreement. In addition to the free trade agreements, the Persian Gulf Cooperation Council has been negotiating for the establishment of free trade zones with the European Union, Japan, China, India, Pakistan, Turkey, Australia, New Zealand, South Korea, Brazil, Argentina, Uruguay and Paraguay for several years.
The Persian Gulf Cooperation Council has also resumed negotiations on free trade agreements with other countries. In this regard, we can mention the resumption of negotiations between Japan and the Persian Gulf Cooperation Council. Japan is seeking to strengthen strategic, economic, development and capital relations with the countries of the Persian Gulf through the conclusion of a free trade agreement, and both sides are also seeking to expand their relations in various fields, especially energy and trade exchanges. On the other hand, the negotiations of the Persian Gulf Cooperation Council with China regarding the free trade agreement have lasted for more than two decades and are still ongoing. Negotiations between the two sides began in 2004, and it is possible that since the Persian Gulf Cooperation Council seeks to increase its economic diversity, the aforementioned agreement is related to matters beyond oil and other areas including trade, services, technology, artificial intelligence, robotics and Include direct investment. According to some analysts, China-GCC relations are expected to grow significantly in the long term.
In general, free trade agreements indicate the strengthening of trade relations and economic cooperation between countries, both at the regional and international levels. Although the Persian Gulf Cooperation Council has started negotiations on free trade agreements for the past two decades, it seems that it intends to speed up the process of concluding such agreements. On the other hand, the member countries of the Persian Gulf Cooperation Council, including Saudi Arabia and the United Arab Emirates, are individually seeking to expand their trade relations, and they also see the Persian Gulf Cooperation Council as a vehicle for advancing this goal more quickly and efficiently. In other words, the Persian Gulf countries are not only looking for free trade agreements with other countries, but they are also seeking to facilitate this in the form of multilateral and regional mechanisms, including the Persian Gulf Cooperation Council.
