Gulf council struggles to overcome boycott, bickering

Agreement on common market not in sight

December 8, 1996
Web posted at: 6:00 p.m. EST (2300 GMT)

(CNN) -- The oil-rich Gulf Cooperation Council (GCC) is coping with its first-ever boycott, a development that is likely to hinder already-stalled efforts to form a common trading market.

Bahrain is absent from this year's meeting because, it claims, it is angry with fellow member Qatar, this year's host. The two nations are embroiled over a long-running territorial dispute, and Bahrain Wednesday put on trial two people it says are Qatari spies.

But after two years of intermittent internal unrest, and with its economy suffering from slow growth, observers say the boycott is designed mainly to deflect attention from Bahrain's domestic problems.

The broader question concerns Saudi Arabia's role. As the Gulf's dominant power, the Saudis could have brought Bahrain to the table, averting the first ever boycott in the GCC's 16-year history. But a last-minute mediation effort to bring all the parties to the Doha, Qatar, summit was canceled.

That may be Riyadh's way of showing displeasure with Qatar over a range of issues, including moving faster than the Saudis wished to build ties with Israel.

The Saudi's are also said to be displeased that Qatar officials walked out of last year's GCC summit to protest the appointment of a Saudi as the group's secretary general.

The GCC's effectiveness has often been questioned. The Gulf states, which control 24 percent of the world's oil reserves, have struggled for years to unify tariffs, something they need to accomplish to form a common market and sign a free trade accord with the European Union that could open European markets to cheap oil.

The sticking point has been the tariff level. The United Arab Emirates, a major regional trading and re-export center, is reluctant to raise tariffs beyond the four to six percent level which it imposes on most goods.

Saudi Arabia, with tariffs of 20 percent, is in favor of a unified tariff of 8 to 12 percent on most goods. Saudi Arabia accounts for about 40 percent of total GCC imports -- about $68 billion a year.

Tariffs and the deal with Europe have been on the table for more than 10 years -- with no resolution in sight.

 

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• 1995 National Trade Estimate - Gulf Cooperation Council

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