The GCC has signed a free trade agreement with South Korea to boost trade and economic ties between the six-member bloc and Seoul.
This is the second such trade deal signed by the GCC in recent months following an agreement with Pakistan in September, the GCC Secretary General Jasem Al Budaiwi said on Thursday.
The agreement is a “historic step towards achieving Gulf economic integration and towards strengthening economic and trade relations between the two sides”, Mr Al Budaiwi said.
It includes trade in goods and services, government procurement, digital trade, co-operation in the areas of small and medium enterprises, customs procedures and intellectual property.
The agreement is expected to further boost the volume of bilateral trade and increase commercial exchange in goods and services between the two sides and diversify their economies.
“The signing of free trade agreements with both Pakistan and South Korea, within a period of three months … takes into account the wonderful economic position that the GCC countries have reached,” Mr Al Budaiwi said.
The deal with South Korea came as a result of negotiations “which reflected the real common desire to strengthen the strategic partnership and economic co-operation between the two sides”, he added.
Economies in the GCC have recovered from the coronavirus pandemic on growth in their oil and non-oil sectors with the growth momentum set to pick up pace in the next two years amid diversification efforts.
The region is forecast to grow by 1 per cent in 2023 before rebounding to 3.6 per cent and 3.7 per cent in 2024 and 2025, respectively, the World Bank said last month.
As part of their diversification efforts, countries in the region are signing new trade and economic deals globally.
The UAE, the Arab world's second-largest economy, is pursuing a target of Dh4 trillion ($1.09 trillion) in foreign trade by 2031 as part of its diversification plans. It also aims to double the size of its economy by 2030.
The UAE's non-oil foreign trade hit a record Dh1.24 trillion in the first half of the year, up 14.4 per cent year-on-year.
It is working towards signing 26 Comprehensive Economic Partnership Agreements as it seeks to attract more investment.
It has signed deals with India, Israel, Turkey, Indonesia, Cambodia and Georgia, each of which are designed to boost economic activity and secure supply chains. The first four agreements are already in effect.
The UAE is South Korea’s second-largest Arab trade partner, with bilateral non-oil trade in the first half of the year reaching $3 billion, similar to the first half of 2022, state news agency Wam reported.
South Korea's President Yoon Suk Yeol meets President Sheikh Mohamed in Abu Dhabi
South Korea’s President Yoon Suk Yeol visited the UAE in January and the two countries signed new deals on hydrogen, crude oil storage, water resources, space exploration and transport.
The two countries have also held talks to promote entrepreneurship and support the growth of small and medium enterprises amid the strengthening of ties.
Saudi Arabia is also strengthening international economic ties and this month signed agreements worth more than $25 billion with China at an investment conference in Beijing.
The kingdom signed more than 60 agreements with the world’s second-largest economy in various key sectors such as energy, agriculture, tourism, mining, financial services, logistics, infrastructure, technology and health care.
A Gulf-China FTA has also been on the table for nearly two decades and received fresh impetus early this year after China’s Foreign Minister Qin Gang called for it to be finalised “as soon as possible” during a phone call with Saudi Arabia’s Foreign Minister Prince Faisal bin Farhan.
Meanwhile, the latest round of trade talks between the UK and the GCC has made “good progress” towards the creation of an agreement, the British government said last month.
The UK's department of business and trade said it would be “a substantial economic opportunity and a significant moment in the UK-GCC relationship” and announced that a sixth round of talks is expected to take place in the first quarter of next year.
