EU to kick-start Gulf free trade talks

EU to kick-start Gulf free trade talks
Europe hopes to restart free trade talks with Gulf states, as the world witnesses a 'worrisome' rise of protectionism from the new US government.
2 min read
01 February, 2017
Mohammed bin Salman has spearheaded Saudi Arabia's latest diversification efforts [Getty]

Europe hopes to restart stagnant free trade talks with Gulf states, partly in response to the "worrisome" rise of protectionism from the new US government, a European Commission vice-president said on Tuesday.

"We would like to restart FTA negotiations with the GCC," Jyrki Katainen, who is in charge of jobs, growth, investment and competitiveness for the EU's executive arm, told AFP in an interview during a visit to the Saudi capital.

Free trade talks that began almost 30 years ago between the six-member Gulf Cooperation Council and the EU have been on hold for many years, the former Finnish prime minister said.

But things are different now with "political momentum" in favour of such negotiations, he said after talks with Saudi officials including the finance and commerce ministers.

Katainen arrived from similar meetings in the United Arab Emirates.

"It's been quite interesting to hear that authorities here as well as in UAE, they agreed with us... that (the) political situation is quite worrisome," Katainen said.

He cited "growing protectionism" and said "it's partially true" that the isolationist policies of US President Donald Trump are giving impetus to EU free trade efforts.

If free trade talks resumed "it would be a strong signal" to the world that the EU and the Gulf believe in open trade.

Shortly after taking office on 20 January Trump withdrew the US from the Trans-Pacific Partnership, an agreement of 12 Pacific Rim economies.

There is growing protectionism in developed economies - not only the US - where globalisation is increasingly regarded as a responsible for sending jobs abroad and eroding living standards.

Katainen, however, said "the benefits come from increasing trade."

He said the need for the economies of both Europe and the Gulf to "modernise" is another factor boosting the prospects for a resumption of free trade talks.

Saudi Arabia, the world's largest petroleum exporter, has begun a wide-ranging economic diversification effort to cope with a collapse in crude revenues since 2014.

After the interview with AFP Katainen left for talks with Deputy Crown Prince Mohammed bin Salman, who is leading the kingdom's economic reform drive.