The GCC inked its second trade deal of the year, this time with South Korea, aiming to bolster investment connections in Asia. Under the agreement, South Korea will eliminate tariffs on nearly 90% of goods, including LNG and petroleum items, while the Gulf nations will do away with tariffs on 76.4% of products and 4% of traded goods, reported by South Korea's Yonhap news agency.
The Free Trade Agreement encompasses various aspects including trade in goods, services, government procurement, SME cooperation, customs procedures, and intellectual property, as stated in a GCC announcement. The GCC has faced complexities in securing FTAs due to internal competing priorities, causing delays in negotiations, notably the prolonged talks with China since 2004.
Recently, there has been a surge in trade discussions as Gulf nations, primarily reliant on oil and gas revenues, aim to diversify their economies and explore new sources of income. Trade figures between the Gulf and South Korea surged from $50 billion to $78 billion between 2021 and 2022, as per data from Asia House. The GCC's trade with emerging Asian nations, including China, escalated to $516 billion in the past year from $383 billion in 2021. Talks between GCC and South Korea, initiated in 2007, experienced a hiatus of almost 13 years before resuming last year.
Jasem al-Budaiwi, the GCC Secretary General, hailed the agreement as a significant stride toward Gulf economic integration and fortifying economic ties between the parties. South Korea's Trade Minister Ahn Duk-geun also expressed enthusiasm, highlighting the potential for synergy among trade, industry, and energy sectors. This year, the GCC, comprising Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain, has been proactive in signing an FTA with Pakistan, advancing discussions with China, reinitiating talks with Japan, and currently engaging in FTA negotiations with Britain.