Mandelson calls for EU-GCC FTA deal to boost Gulf economies
03 Mar '07
4 min read
EU Trade Commissioner Peter Mandelson has called for "clear political leadership" from the Gulf Cooperation Council members to enable an agreement on a Free Trade Agreement between the GCC and the EU. Speaking at the Jeddah Economic Forum in Saudi Arabia. Mandelson argued that a completed FTA would make an important contribution to the greater diversification of Gulf economies by encouraging inward investment and boosting the competitiveness of Gulf exporters to Europe.
Mandelson said: "We are now very close to an agreement that will not only be the first ever region-to-region FTA in the global trading system but which has the potential to open doors for new investment and new trade beyond what we offer each other through the WTO. With clear political leadership from the GCC I believe we will be in a position to resolve the remaining issues and agree a deal soon. That is my goal".
Mandelson argued: "The Gulf is looking for a role in the global economy beyond the market for hydrocarbons. Like everything else on this planet that runs on oil and gas, the Gulf economy now needs alternative fuels. As the Gulf's biggest market, the EU has supported and encouraged regional economic integration among the GCC - which is a slow and complex process but vital for creating economies of scale and generating the opportunities for investment needed for employment growth".
He noted: "In Europe our challenge is maintaining an advanced economy with a rapidly ageing population. Here the problem is the opposite: the Gulf has an undiversified economy and a huge number of young people. Between a third and a half of the Gulf's population is less than twenty years old. The whole Arab world faces the same challenge - it needs to create 5 million jobs a year, every year, just to keep pace with population growth. And some two thirds - as much as three quarters here in Saudi Arabia - of the exports of the GCC are oil and gas, which are finite resources with highly volatile prices. Put those two facts together and you have a huge economic and human development challenge".