Case Study- Answer all Questions (2 x 2 marks = 4 marks)

Is There A Need For A Free Trade Agreement Between The European Union And Gulf Cooperation Council?

After twenty-four years, EU-GCC member countries are unable to reach a treaty on a Free Trade

Agreement (FTA). The Joint Council meeting held in Muscat at the end of April 2009 underlined the broad commitment of both sides to broaden and deepen relations outside the scope of an FTA. There is a perception within the GCC that, up to this point, the EU has contributed little in terms of helpingto integrate the GCC into global markets and that in terms of policy-exploring opportunities in the EU-GCCrelationship, the EU has been highly inflexible; but, unless the issue, as a whole, is resolved, it is likely that otherareas where cooperation could be advanced could be held back as well. In other words, the current inflexiblepolicies of the EU and GCC member countries have served as an impediment to achieve broader political andeconomic goals.

TheEU has virtually no economic gains as a result of free trade, and the GCC economic gains are insignificant due tolack of competiveness of GCC industries. GCC countries are not ready to take an advantage of trade liberalizationwith the EU. The GCC is not a dominant trade partner to the EU, while the EU is only a major exporter to GCCcountries comprising about 30% of total GCC imports. GCC countries exports to the EU countries are primarilyhydrocarbons and an insignificant percentage of total GCC exports.

The primarily motives behind FTA negotiations by both sides were geopolitical gains; thus, future FTAnegotiations should focus on political, environmental, cultural, and security issues. The field of energy security andenvironmental protection offer another area of cooperation between EU and GCC member countries. Outside theeconomic and social aspects, the current political climate in both the regions and around the globe underscores thenecessity for a reinvigorated commitment in EU-GCC relations. Security in the Gulf remains highly volatile. Inconclusion, there is a need to focus on the most pressing issues at hand to formulate common approaches andpolicies; but, at the same time, for both sides there is a need for a fresh look at concluding an FTA not only focusingon economic gains.

Source: Fahad Al-Eatani, King Abdulaziz University, Saudi Arabia -International Business & Economics Research Journal January/February 2014 Volume 13, Number 1

Questions

11. Write a brief note on the EU-GCC trade relationship.

12. What is the role of FTA in strengthening the relationship with EU and GCC countries?

please we need short answer