Greece's debt crisis is spurring the EU to push for a free-trade agreement with the liquidity-wealthy GCC, Sultan al Mansouri, the UAE Minister of Economy, said yesterday. "Relations between countries do differ once there are certain situations like crises," Mr al Mansouri said. "It's in the interests of the Europeans to attract more investment and trade from the GCC and the only way to do that is making sure there is this kind of free-trade agreement between the two sides."
Talks on the issue faltered last year, after almost two decades of intermittent negotiations, partly because of GCC petrochemical subsidies, which the Europeans argue act as a trade barrier by making goods and services artificially competitive against imports from the EU. Another sticking point is limits on European companies holding stakes in companies within the GCC. Prospects for restoring the talks appear uncertain. On a visit to the UAE, Angela Merkel, the German chancellor, pledged last week to revive plans for the free-trade agreement. However, Abdulrahman al Attiyah, the secretary general of the GCC, made a speech last week in which he appeared to cast doubt on the prospect of more negotiations.
Mr al Mansouri said discussions about petrochemical subsidies were one of the important issues on the GCC side but that it was a general "give and take process" between the EU and the Emirates. "It has nothing to do with the UAE," he said. "It's mainly to do with one of the other countries in the region." Eliminating tariffs on goods and services traded between the GCC and one of its biggest commercial partners is seen by economists as a way to expand trade after the global financial crisis.
Mr al Mansouri also defended the UAE's right to trade with Iran, the Emirates' biggest re-export destination. Iran has faced growing economic pressure over recent months in response to its nuclear programme. China, Japan and India are among Iran's trading partners that have cut back on their imports of Iranian crude oil. The US has been trying to encourage foreign companies to cut their ties with Iran. Iran, Brazil and Turkey signed this month an agreement over a nuclear fuel swap aimed at easing the international concern over Iran's atomic ambitions.
"Traditionally Iran has been an important trading partner and will continue to be so; they are neighbours and we cannot move somewhere else," Mr al Mansouri said. UAE non-oil re-exports to Iran stood at US$7.1 billion (Dh26.07bn) last year, accounting for 17.6 per cent of total re-exports. @Email:tarnold@thenational.ae
