The GCC trade agreements: regional integration challenges and opportunities
The six monarchies nestled on the Arabian Peninsula – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) – joined together to create the Gulf Cooperation Council (GCC) in early 1981 with the promise for close trade relationships that would bind conservative rulers and their societies together. While the priority was security, the founding fathers camouflaged their goals behind economic integration that, ironically, failed to eliminate internal crises. Nevertheless, and despite the emergency that enveloped Qatar in 2017, a new generation of Khalijis (Arab Gulf citizens) grew into full interdependence, as greater intimacy among GCC states led to the adoption of mutually beneficial policies. Still, GCC states confronted two sets of economic integration challenges: bilateral free trade agreements favoured by Bahrain and Oman, and multilateral commitments envisaged by Saudi Arabia, Bahrain, Kuwait and the UAE. While the majority favoured coordinated trade activities as a regional organization, multilateral free trade agreements (FTAs) with other economic entities produced a mixed record. The chapter addresses the GCC states’ economic regional integration challenges and member states’ putative benefits that arose through trade agreements. It also focuses on the two odd cases of bilateral FTAs between the USA and, respectively, Bahrain and Oman, to determine whether these were attempts to bypass the GCC precisely to strengthen bilateralism at the expense of multilateralism. It closes with assessments of recently approved FTAs with several other countries, to decipher whether multilateral agreements might alleviate the GCC states’ plans to ease future economic woes.