China and the Gulf Cooperation Council (GCC) are set to
negotiate the establishment of a free trade agreement (FTA)
soon.
"The first round of the FTA talks will start in January, most
probably in Riad, Saudi Arabia, the headquarters of the GCC
Secretariat," Faisal Al-Ghais, Kuwait's ambassador to China and
current chairman of the Council of GCC Ambassadors in Beijing, told
China Daily.
Kuwait currently chairs the GCC, which is a regional economic
organization established in 1981 and comprises the six Gulf states:
the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar and Saudi
Arabia.
The FTA will maximize the complementarities of the two economies
and boost two-way trade and investment in the future, said
Al-Ghais.
The pact is expected to be "as comprehensive as possible" to
include tariff reductions and a simplification of the flow of goods
and facilitation of mutual investments.
For the 23-year-old GCC, China is a market of vast potential for
their energy goods such as crude oil and petrochemicals.
The GCC possesses 45 percent of world oil reserves and accounts
for 20 percent of world oil production.
Also, the FTA aims to facilitate investment to make it easier
for strong-economy GCC nations to invest in an increasingly open
China, for China to invest in GCC countries and for both sides to
undertake joint investments in third parties.
For Chinese commodity manufacturers, the tariff-cutting FTA will
make them more competitive in GCC countries, which are home to 20
million consumers.
"Chinese goods such as textiles, machinery, electrical
appliances and electronics sell well in the GCC with their
competitive prices and improving quality," the ambassador said.
China is now the GCC's third largest trading partner, behind the
United States and Japan.
The bilateral trade volume is estimated to exceed US$20 billion
in 2004, jumping from last year's US$16.9 billion.
The progress of the FTA is in line with the efforts of both
sides to promote regional economic cooperation with trading
partners and neighbors.
China will officially launch a FTA with the Association of
Southeast Asian Nations at the start of next year. It is also
active in talks with close trading partners such as New Zealand,
Australia and Chile.
The GCC has already formed an FTA with Lebanon. It is also
negotiating with the EU, Morocco, and ASEAN.
Significant achievements were made during the GCC chief
negotiator Yusef Al-Sadoon's visit to China on November 23, when he
met Fu Ziying, assistant minister of commerce of China, and
discussed negotiation mechanisms, FTA coverage, and a rough
timetable.
Fu will head the negotiating team representing China, according
to Al-Ghais.
China and the GCC also reached a consensus on some principles of
FTA negotiations during Al-Sadoon's visit.
According to Al-Ghais, the two sides will pursue a gradual and
practical approach following the China-ASEAN FTA model.
"We will sign an agreement after we finish negotiating each
sector," he said.
China and the GCC will begin talks about the trade in goods,
where Al-Ghais believes an agreement can be reached "without too
much difficulty."
The two sides will then work on more complex issues, such as the
settlement of disputes, investment and services.
The ambassador said the agreement on services could be the most
difficult part, as both sides should spend time studying each
other's laws and commercial circumstances.
(China Daily December 8, 2004)
