The EU plans to open a representative office in Abu Dhabi next month as it seeks to get a stalled free trade agreement with the GCC back on track.
Europe seeks to revive stalled GCC trade pact
The European Union aims to open a representative office in Abu Dhabi next month as it seeks to get a stalled free-trade agreement with the GCC back on track.
Angelika Niebler, a member of the European Parliament, and chairwoman of the European Parliament's Delegation for Relations with the Arabian Peninsula, said signing the deal was a priority for European officials.
"In a couple of weeks the EU will open a new office in Abu Dhabi," the German politician said yesterday at the EU GCC Invest event in the capital. "This signals there is a high priority in trying to conclude this agreement."
Both sides started discussing a free-trade agreement more than two decades ago but negotiations faltered most recently over the GCC wanting to retain the right to impose duties on exports.
But against a backdrop of a lingering crisis in the euro zone, the EU is keen to inject impetus into reviving the talks.
The GCC was the EU's fifth largest export market in 2011 but the rate of bilateral trade growth crashed to 6.3 per cent last year from 63.7 per cent in 2011, according to EU data. The EU represented the GCC's biggest trade partner in 2011.
Currently, the EU only has one office in the GCC, in Riyadh. Ms Niebler said the Abu Dhabi office would help the UAE and the EU to work on a political level too on areas such as research.
"Opening an office shows our commitment here. Politically, it is a big thing to open an office here, given our financial constraints," she said.
She confirmed GCC duties on exports were the "main issue" holding back a breakthrough. EU issues surrounding the GCC's human-rights record had been resolved, she said.
A large chunk of GCC exports heading to the EU are made up of petrochemical raw materials and feedstock, used for plastics and other materials, along with aluminium products.
Observers say GCC duties on exports could be used to help to avoid an oversupply of such products and keep prices from falling. Saudi Arabia is believed to be the main advocate of the duties.
Dirk Vantyghem, the director of international affairs, at Eurochambres, the European Association of Chambers of Commerce and Industry, said the trade deal would be key for the private sector in both regions.
The Abu Dhabi office may also be used to help to promote investment opportunities in Europe. Ms Niebler said the EU was doing its best to revive investor confidence.