Persian Gulf Nations Announce New Customs Union

Six Persian Gulf countries, members of the Gulf Cooperation Council, have announced the formation of a new customs union by 2003. The countries – Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Oman and Bahrain – agreed to form the customs union in order to help pave the way for free trade agreement negotiations with the E.U. The announcement was made after a two-day summit meeting in Oman.

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nder the guidelines announced by the six countries, a uniform 5% import tariff will be adopted by 2003 replacing the current tariff structure for each country which varies from 5% to 15%.

The Gulf Cooperation Council, a loosely organized political alliance established in 1981, had previously announced plans to set up a customs union by 2005, but has decided to accelerate the process in order to become better positioned for potential free trade negotiations with E.U. or other Western powers in the near future and to implement a new regional currency.

The member countries of the Gulf Cooperation Council account for about half of the world’s known oil reserves.

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