New move to launch free trade in Gulf

Date: 15/05/1997

PLEDGES made in February to complete an EU-Gulf free trade agreement by 1998 fooled no one, but administrators are doing their best to kick-start regional relations in the meantime.

The first EU-Gulf 'interprise event' in Riyadh, Saudi Arabia, next week will see almost 100 companies from Europe and the Middle East swapping business cards and seeking new partners in each other's markets.

European consultants also plan to take home a fistful of company profiles and set about matching them to potential investors at home.

“Unlike some industrial conferences, this is a genuine meeting of business minds. The politicians will stay safely at home,” stressed a Commission official involved in the event.

The six Gulf states already constitute one of the EU's largest regional markets - bigger than China or Russia - and boast 25 million consumers with a gross domestic product per capita of around 6,500 ecu. But analysts believe there is a lot more trading potential yet to be tapped.

Brussels officials hope the Riyadh meeting, which will only be attended by small and medium-sized enterprises, will show European businesses that there is much more to the Gulf countries than oil.

Smaller investors nevertheless remain wary of the often harsh business and political environment offered by the region, and have so far received little encouragement from their leaders.

Attempts to form an EU-Gulf free trade area have been stalled since 1989, not helped by a war and the threat of European energy taxes in the Nineties.

A February meeting of foreign ministers in Doha did offer some encouragement. In particular, promises by the Gulf Cooperation Council to unify tariffs by the end of the year, an important precondition for a deal, suggested a new political enthusiasm in the Middle East, and EU negotiators hope to resume talks by the summer.