Improving relations between the EU and the countries of the Gulf Cooperation Council

The Commission wants to boost EU-GCC relations by founding them on shared political and security interests, a framework of powerful commercial, energy and economic interests, high-quality cultural relations and cooperation between civil societies

ACT

Communication from the Commission to the Council of 22 November 1995 on improving relations between the European Union and the countries of the Gulf Cooperation Council (GCC) [COM(95) 541 final - Not published in the Official Journal]

SUMMARY

Context

The Gulf Cooperation Council (GCC) was set up in 1981 and brings together Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. Ever since its creation, it has been keen to establish links with the European Community, including a free trade agreement that has still not been concluded.

A Cooperation Agreement, however, has been in place since 1988, and is aimed at strengthening relations and preparing the free trade negotiations. Since then, the Gulf War and the GCC's reservations on the text have blocked the conclusion of the free trade agreement. The Cooperation Agreement, for its part, has yielded only limited tangible results.

The importance of the EU-GCC relationship lies in the parties' extensive interdependence in terms of energy, trade and investment. The EU needs energy supplies from the GCC countries, and the EU Member States in turn represent a major market for the GCC's exports of refined petroleum products, petrochemical products and aluminium. The EU is also one of the largest investors in the GCC.

Improving relations

The Commission reiterates the recommendations made at the Ministerial meeting in Granada in July 1995 to boost EU-GCC relations. These include:

strengthening the political dialogue;
increasing economic cooperation and unblocking the ongoing free trade negotiations;
developing instruments of cultural and scientific cooperation to promote increased reciprocal knowledge.

The need to strengthen political dialogue arises from current shortcomings, such as the infrequency of ministerial meetings. The dialogue would provide an opportunity for both sides to better appreciate the extent of their shared political and security interests. The Middle East peace process and the Mediterranean policy could benefit from the strengthened dialogue, which would also enable the two sides to discuss the issues of human rights, democracy and the prevention of terrorism.

Given their interdependence, strengthening the framework of energy and economic interests can benefit both regions, since more GCC investment in EU refining and downstream activities would go hand in hand with EU countries' investment in GCC upstream and downstream energy and energy-related activities. Obtaining a preferential trade agreement benefiting both sides and diversifying its industrial base to prepare for the post-oil age are still major concerns for the GCC. A free trade agreement would enable economic operators on both sides to develop cross-investments, pursue vertical integration and conclude industrial alliances.

The Commission also recommends that action be taken to improve mutual understanding, considering that relations have not produced a degree of contact to assist in the development of official links. It is therefore necessary to find new areas of cooperation and develop existing ones, such as information and communication technologies, scientific cooperation and the environment. For the Commission, a key new area is decentralised cooperation, involving civil society and non-governmental organisations, which could contribute to mutual understanding. It also recommends that a delegation should be opened in Riyadh, the capital of Saudi Arabia.

There is, finally, a need to improve the quality of relations to highlight the role Europe plays in the GCC's economic security. In the Commission's view, the EU-GCC relationship is so important that it cannot be left to take care of itself; it also adds regional value to bilateral relations.

Conclusions and recommendations

The Commission concludes by recommending that the Council:

reaffirm the strategic importance of a strong GCC;
reaffirm its commitment to the development of relations;
include the GCC countries in the EU's strategy for improving relations with other regions, in particular with the Mediterranean area;
reaffirm its desire to achieve a qualitative improvement in these relations;
reinforce EU-GCC political cooperation at ministerial level.

For its part, the Commission undertakes to identify obstacles to progress in the free trade negotiations and to study the possibility of presenting a complementary mandate for negotiation on services. It must also make proposals for applying the Cooperation Agreement and improving mutual understanding through increased contacts.

See also