The Cooperation Council for
the Arab States of the Gulf
(GCC)
Secretariat General
Adopted by the GCC Supreme Council
(22nd Session; 31 December 2001)
in the City of Muscat, Sultanate of Oman
Introduction
This publication
the contains the text of the Economic Agreement Between the Gulf Cooperation
Council States (the “Economic Agreement”) signed by their Majesties and
Highnesses GCC leaders, on December 31, 2001 (Shawwal 16, 1422 AH) during the 22nd
Session of the Supreme Council in Muscat, Sultanate of Oman.
The new Economic
Agreement contains a comprehe-nsive revision of the original Economic Agreement
that was signed in November 1981 (Muharram 1402 AH), which laid down the ground
for the economic relationship among Member States and established the GCC Free
Trade Area. The 1981 agreement
emerged from the economic circumstances prevailing at the time it was drawn up,
just a few months after the establishment of the GCC. Similarly, the new agreement is a reflection of the current
circumstances of the GCC Member States.
The new Economic Agreement furthers the objectives achieved by the 1981
agreement, enhancing and strengthening economic ties among Member Sates, and
harmonizing their economic, financial and monetary policies, their commercial
and industrial laws, as well as their customs regulations.
During the first two decades of the GCC existence, Member Sates succeeded in developing their economic ties to bring them closer to full economic integration and economic unity. The Supreme Council, during its annual meetings, adopted several vital resolutions in the economic field that pushed joint economic action great steps ahead. The most important resolutions have been those relating to the GCC customs union, the common market, development integration, and the economic and monetary union.
To provide the
legal environment required to cope with these developments, the Supreme
Council, in its 20th Session (Riyadh, November 1999), ordered a
revision of the 1981 economic agreement to bring it into line with the new
developments in GCC joint economic action and to complete the requirements of
economic integration among the Member Sates, taking into account the new global
economic environment.
To carry out the
Supreme Council’s instructions, the Secretariat General was instructed to
prepare a draft revised economic agreement and submit it to Member States to
propose any addition, deletion or amendment to the provisions of the agreement,
after which it was required to submit the revised draft to GCC competent
committees. After the preliminary
draft was prepared and submitted to Member States for consideration, a
technical team was formed from Member States and the Secretariat General to
examine the draft agreement in light of Member States’ comments. The team held intensive meetings in
February and March 2001 where the proposals and comments of Member States were
discussed and the draft agreement was amended accordingly. A Committee of the GCC Deputy Ministers
of Finance and Economy was convened in two meetings in April and September 2001
to study the new revised draft.
The Financial and Economic Committee (FEC) in its 55th meeting (May
2001), and 56th meeting (October 2001) reviewed the draft agreement as amended
by the deputy ministers’ committee.
In its extraordinary meeting held in December 2001, the FEC adopted the
final draft agreement, which the Ministerial Council (in its 81st
Session, December 2001) then submitted to the Supreme Council for approval. Their Majesties and Highnesses GCC
leaders signed the Economic Agreement between the GCC States on 31 December
2001 during the 22nd Session (the Muscat Summit). The agreement is now in the process of
being ratified by the Member States and will come into force thereafter.
The preparation of
the new Economic Agreement was an excellent example of joint work, as a large
number of experts from various GCC governmental agencies and the Secretariat
General contributed over two years to the preparation and revision of the draft
treaty. The technical team
assigned to this task and the other committees made great efforts in updating
the original agreement, to come up with a text that reflects the achievements
of GCC joint economic action in the past two decades and future aspirations of
GCC citizens.
The new agreement
contains new provisions or substantially revised ones that reflect Supreme
Council resolutions and directives, as well as new developments in GCC joint
work, such as provisions relating to the Customs Union (Chapter I), Common
Market (Chapter II), Economic and Monetary Union (Chapter III), Development
Integration (Chapter IV), Human Resources Development (Chapter V), Cooperation
in the Fields of Scientific and Technical Research (Chapter VI), Transportation,
Communications and Infrastructure (Chapter VII).
The new agreement
represents a new style of GCC joint work as it does not only call for
cooperation and coordination among Member States, but goes beyond that to
expressly provide for the economic integration among Member States through the
adoption of specific programs and workable mechanisms. The GCC working committees and the
Secretariat General will follow up the implementation of the agreement according
to specific timetables. Chapter
VIII contains mechanisms for implementation and follow-up, as well as
settlement of disputes that might arise during implementation of the treaty.
January 2002
The Secretariat General – Economic Affairs
Division
Note on the Translation:
The Arabic text of the Economic
Agreement is official and binding.
The English translation is provided only as a guide. This English translation was prepared
by the Economic Integration Department of the GCC Secretariat General-Economic
Affairs.
The Economic Agreement
(The Economic Agreement)
The GCC Member States,
Pursuant
to the GCC Charter which
calls for closer ties and stronger links among Member States; and
In the light of reviewing the economic achievements
attained since the inception of the Council, including accomplishments attained
by the Economic Agreement signed in 1981 in developing, which include enhancing
and strengthening economic ties among Member States, and harmonizing their
economic, financial and monetary policies, their commercial and industrial
legislation and customs laws applicable therein, including the agreement on the
customs union; and
Seeking to achieve advanced stages of economic integration that would lead to
a Common Market and an Economic and Monetary Union among Member States
according to a specific timetable, while enhancing market mechanisms and
fostering the role of the private sector; and
Desiring to enhance the economy of the GCC Member States in the light of
recent global economic developments, which require further integration among
the Member States to strengthen their negotiating position and competitive
capacity in international markets; and
Responding to the aspirations and expectations of GCC citizens towards achieving
Gulf citizenship, including equality of treatment in the exercise of their
rights to movement, residence, work, investment, education, health and social
services,
Have hereby agreed as follows:
Chapter I
Article One: The Customs Union
Trade between the
GCC member States will be conducted within the framework of a customs union
that will be implemented no later than the first of January 2003. It shall include, at a minimum, the
following:
i.
A common external customs
tariff (CET).
ii. Common customs regulations and procedures.
iii. Single entry point where customs duties are collected.
iv. Elimination of all tariff and non-tariff barriers, while taking into
consideration laws of agricultural and veterinarian quarantine, as well as
rules regarding prohibited and restricted goods.
v. Goods produced in any Member State shall be accorded the same
treatment as national products.
To secure better
terms and more favorable conditions in their international economic
relationships, Member States shall draw their policies and conduct economic
relations in a collective fashion in dealing with other countries, blocs and
regional groupings, as well as other regional and international organizations.
Member States shall
take the necessary measures to achieve this objective, including the following:
i.
Negotiate collectively in a
manner that serves the negotiating position of the Member States.
ii. Collectively conclude economic agreements with trading partners.
iii. Unify import and export rules and procedures.
iv. Unify commercial exchange policies with the outside world.
Chapter II
GCC natural and
legal citizens shall be accorded, in any Member State, the same treatment
accorded to its own citizens, without differentiation or discrimination, in all
economic activities, especially the following:
Member States shall
agree to complete implementation rules sufficient to carry this out and bring
into being the Gulf Common Market.
Economic and Monetary Union
Article Four: Monetary and Economic Union
Requirements
For the purpose of achieving a monetary and
economic union between Member States, including currency unification, Member
States shall undertake, according to a specified timetable, to achieve the
requirements of this union. These
include the achievement of a high level of harmonization between Member States
in all economic policies, especially fiscal and monetary policies, banking
legislation, setting criteria to approximate rates of economic performance
related to fiscal and monetary stability, such as rates of budgetary deficit,
indebtedness, and price levels.
For the purpose of
enhancing local, external, and intra-GCC investment levels, and provide an
investment climate characterized by transparency and stability, Member States
agree to take the following steps:
1.
Unify all their
investment-related laws and regula-tions.
2.
Accord national treatment to
all investments owned by GCC natural and legal citizens.
3.
Integrate financial markets in
Member States, and unify all related legislation and policies.
4.
Adopt unified standards and
specifications for all products, according to the Charter of the GCC
Standardization and Metrology Organization.
Member States shall coordinate their external policies related to
international and regional development aid.
Chapter IV
Development Integration
Member States shall
adopt the policies necessary to achieve an integrated development process in all fields in all GCC states and deepen
coordination between all activities contained in their national development
plans. These policies shall
include the implementation of the Long-term Comprehensive Development Strategy
of the GCC Member States.
i.
Member States shall adopt the
policies necessary to enhance the participation of the industrial sector in the
economy, coordination of industrial activity on a GCC-wide integrated basis,
including the implementation of the Unified Strategy of Industrial Development
for the GCC Member States.
ii. Member States shall unify their industrial legislation and
regulations, including rules related to industry promotion, anti-dumping, and
precautionary safeguards.
For the purpose of
achieving integration between Member States in the fields of petroleum and
minerals industries, and other natural resources, and enhancing competitive
position of Member States,
1. Member States shall adopt integrated policies in all phases of oil,
gas, and minerals industries to achieve optimal exploitation of natural
resources, while taking into account environmental considerations and the
interests of future generations.
2. Member States shall adopt unified policies for oil and gas, and take
common positions in this regard towards non-member states and at international
and specialized organizations.
3. Member States and oil and gas companies working within them shall
cooperate in supporting and developing research in the fields of oil, gas, and
natural resources, and enhance cooperation with universities in these fields.
Member States shall adopt the policies necessary to achieve
agricultural integration between them, and long-tem optimal utilization of
available resources, especially water, including the implementation of the
Common Agricultural Policy of the GCC Member States and related GCC
legislation.
Member States shall adopt the policies and mechanisms necessary to
protect the environment according to all relevant legislation and resolutions
adopted within the GCC framework, as representing the minimum level for
national rules and legislation.
For the purpose of enhancing ties between Member States in the
productive sectors, utilizing economies of scale, achieving economic
integration, and improving the distribution of integration benefits among them,
Member States shall undertake the measures necessary to support, finance, and
form joint projects, both private and public, including the following:
Chapter Five
Member States shall implement the “General Framework of Population
Strategy of the GCC States”, adopt the policies necessary for the development
of human resources and their optimal utilization, provision of health care and
social services, enhancement of the role of women in development, and the
achievement of balance in the demographic structure and labor force to ensure
social harmony in Member States, emphasize their Arab and Islamic identity, and
maintain their stability and solidarity.
Article
Seventeen: Increasing Labor
Participation Rates and Training of Nationals
i.
Member States shall adopt
effective policies to increase participation rates of nationals in the labor
market, especially in high-skill jobs, and adopt effective programs to raise
the skill levels of national labor force, develop on-the-job training programs,
participate in financing such programs, and provide incentives for job seekers
in the private sector. Aid granted
to the private sector shall be linked with the adoption of programs intended
for the employment and training of national manpower.
ii. Member States shall adopt the policies necessary for rationalizing the
employment of foreign workers.
Scientific and Technical Research
Article Eighteen: Scientific and Technical Research
Member States shall adopt, as basic priorities for development,
policies to support joint scientific and technical research, and develop their
own joint scientific, technical, and information technology databases,
including the adoption of the following policies:
1.
Increase the funds allocated to
scientific and technical research.
2.
Encourage and provide the
necessary incentives to the private sector to contribute to the funding of
specialized scientific and technical research,
3.
Ensure that international
companies operating in the GCC States sponsor specialized programs for
scientific and technical research in the Member States.
4.
Establish a native scientific,
technical, and information technology base that fully utilizes the expertise of
international and regional organizations.
5.
Integrate scientific research
institutions in the GCC States in order to develop and activate the scientific,
technical, and information technology base referred to in this article and work
jointly to set up common research centers.
For the purposes of developing and fully
utilizing their scientific, technical, and information technology base, Member
States shall take the following measures, as a minimum:
1. Develop mechanisms for achieving
optimal utilization of scientific and technical research in both public and
private sectors, and continued coordination between the executive bodies on the
one hand and the outputs of the scientific, technical, and information
technology base, on the other.
2. Make the
outputs of the scientific, technical, and information technology base available
to specialists, researchers, businessmen, and investors through simplified
procedures.
3. Support and develop technical
information networks, systems and centers in member states, and adopt programs
to facilitate information dissemination and exchange among the institutions of
scientific and technical research in the GCC States.
Member States shall develop programs
encouraging talented individuals and supporting innovation and
invention; cooperate in the field of intellectual property and develop
regulations and procedures ensuring protection of intellectual property rights;
and coordinate their relevant policies towards other countries, regional blocs
and international and regional organizations.
Article Twenty-one: Means of Transportation
Member States shall accord all means of passenger
and cargo transportation belonging
to any Member State, while transiting or entering their territories, the same
treatment accorded to their national means of transportation, including the
level of duties, taxes and facilities.
Member States shall accord marine means of
transportation belonging to any Member State and cargoes thereof the same
preferential treatment they grant to their national counterparts in the use of
their facilities, whether during docking or while calling at their ports,
including fees and taxes, as well as services of pilotage, docking, freight,
loading, unloading, maintenance, repair and storage.
1. Member States shall adopt integrational policies for the
establishment of the infrastructure projects such as seaports, airports,
desalination plants, electric power stations, and roads. These policies should aim to facilitate
trade exchange between member states, realize common economic development, and
interlink their economic activities.
2. Member States shall take the necessary measures to ensure
integration of their aviation and air transport policies.
3. Member States shall develop and integrate the various means of land and marine
transportation in order to facilitate the movement of citizens and goods and
achieve economies of scale.
Member States shall take all the
necessary measures to ensure the integration of their communication policies,
including telecommunication, post and data network services, which would lead
to improving their service levels and economic efficiency and to strengthening
the ties between GCC citizens as well as private and public institutions.
Member States shall take all necessary actions to
facilitate banking and trade
exchange through electronic means of communication, and unify their electronic
commerce legislation.
Article
Twenty-six: Implementation of the Agreement
1.
Committees working under the framework of the GCC shall implement this
Agreement, each within its competence.
2. The
Secretariat General shall follow up implementation of the Agreement.
3. Member
States shall provide the Secretariat General with periodic reports regarding
implementation of the provisions of this Agreement and the applicable
resolutions taken to implement those provisions. In the light of these reports, the Secretary General shall
submit a comprehensive periodic report to the Supreme Council. The Secretariat General shall set a
mechanism for the preparation of these reports, their contents, and the
completion dates thereof.
1. The
Secretariat General shall hear and seek to amicably settle any claims brought
by any GCC citizen or official entity, regarding non-implementation of the
provisions of this Agreement or enabled resolutions taken to implement those provisions.
2. If the
Secretariat General could not settle a claim amicably, it shall be referred,
with the consent of the two parties, to the GCC Commercial Arbitration Center
to hear the dispute according to its Charter. Should the two parties not agree to refer the dispute to
arbitration, or should the dispute be beyond the competence of the Center, it
shall be referred to the judicial body set forth in Paragraph 3 of this
Article.
3.
A specialized judicial commission shall be formed, when deemed necessary, to
adjudicate disputes arising from the implementation of this Agreement or
resolutions for its implementation.
The Financial and Economic Committee shall propose the charter of this
commission.
4.
Until the charter of the commission referred to in paragraph (3) above comes
into force, all disputes which the two parties do not agree to settle through
arbitaration and which could not
be amicably settled by the Secretariat General, shall be referred to the
competent GCC committees for
settlement.
Article Twenty-eight:
Ratification and publication
Member States
shall take all measures necessary to ratify this Agreement and the relevant
resolutions for its implementation, publish them in the official notification
media, and implement them according to their provisions.
This Agreement shall come into force after being
ratified by all Member
States. The Secretariat General
shall notify member States of the date of its coming into force.
A
Member State may be granted a temporary exclusion from implementing certain provisions of this Agreement as may be
necessary due to temporary local situations prevailing in that State or
specific circumstances encountered. Such exclusion shall be for only a limited period and shall
be authorized only by a resolution from the Supreme Council.
No Member State may grant to a non-Member
State any preferential treatment exceeding that granted herein to Member
States, nor conclude any agreement that violates provisions of this agreement.
1. The
provisions of this Agreement shall have prevail if found in disagreement with
local laws and regulations of the Member States.
2. This
Agreement shall supersede the GCC Economic Agreement signed in 1981 AD (1402
AH), and the provisions contained herein shall supersede equivalent provisions
set forth in bilateral agreements (between member states).
3. Until the GCC Customs Union is
established, the provisions of Article 3 of the GCC Economic Agreement
signed in 1981 AD (1402 AH) shall continue to be applied. The percentage of the added value
provided for in said Article may be amended by a decision of the Financial and
Economic Committee.
Article Thirty-three: Amendment and Interpretation
1. This Agreement may not be amended
without approval of the Supreme Council.
2. The
Financial and Economic Committee shall be authorized to interpret this
Agreement.
Signed in the city of Muscat (Sultanate of Oman) on Monday, 16
Shawwal 1422 AH, corresponding to 31 December 2001 AD.
President, United Arab Emirates
Signing for
His Highness:
His Highness Shaikh Maktoum ibn Rashed Al Maktoum
Vice President, United Arab
Emirates
Prime Minister, Governor of
Dubai
Emir of the State of Bahrain
King of Saudi Arabia
Crown
Prince, Deputy Prime Minister, and Commander of the National Guard, Kingdom of
Saudi Arabia
Sultan of Oman
Emir of the State of Qatar
His Highness Shaikh Jaber Al Ahmad Al Jaber Al Sabah
Emir of the State of Kuwait
Deputy Premier and Minister of
Foreign Affairs