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USMEF South American Expo (Click to download PDF form)

Persian Gulf States Customs Union Debuted January 1

The long-awaited Persian Gulf Customs Union came into being on December 22 and the creation of this single tax zone removes the main obstacle in the path of the free trade agreement the Gulf states wish to sign with the European Union. From January 1, a common customs tariff set at five percent is charged in all six Gulf Cooperation Council (GCC) states. Imported frozen meat is subject to a 5 percent duty, while fresh and chilled meat are exempt.  

The GCC customs union, which covers more than 15,000 imported items, will give birth to the Middle East’s biggest economic bloc, with a GDP of nearly $320 billion in 2001, around 45 percent of the combined Arab economy. The GCC consists of Saudi Arabia, Qatar, Kuwait, the United Arab Emirates, Oman and Bahrain.

The union is designed to improve the quality of consumer production while reducing the prices, and to increase inter-GCC trade. The union was one of the demands of the EU to conclude a Free Trade Agreement with Gulf countries. The Europeans say they prefer to deal with a single Gulf block‚ with a unified tariff instead of dealing separately with each country. The agreement means lower European tariffs on the main Gulf exports - aluminum and petrochemicals.