GCC trade agreement Research Paper Example | Topics and Well Written Essays - 2250 words

GCC trade agreement - Research Paper Example , the trade agreement encourages intraregional mobility of capital, technology, goods and capital; hence allowing member countries to easily access resources and goods that they don’t have comparative advantage. The monetary union also allows for easy economic exchange between the countries through the use of a single currency. There is also a trade agreement between GCC and European Union (EU). This trade agreement also affects the economies of GCC member states by expanding trade into new regions of Europe and improving the economic and social welfare of the people of the member states. Specifically, the FTA between GCC and EU enables member states to acquire imports at internationally competitive prices. This is achieved through reduced tariffs and other trade barriers between GCC member countries and the member countries of the EU. In article 1 of chapter 1 (Trade) of the 2001 economic agreement of the GCC, a common external tariff and a common customs regulation was established to enhance trade among members and prevent unfair competition from external corporations (GCC, 2001). Goods produced within any member country were also considered as the national products of each country. Furthermore, tariff and non-tariff barriers were eliminated. Article 2 provides rules on international economic relations whereby member states are required to negotiate collectively as GCC in order to serve the negotiating positions of member countries (GCC, 2001). Economic agreements with external trading partners should also be collectively concluded to serve the interests of member countries. Export and import rules and procedures, and commercial exchange policies of the region are also unified to enhance its collective negotiating power with international partners. Bahrain is one of the six members of the GCC which is affected by the trade agreement among the GCC member states. Unlike other members of the Gulf Cooperation Council, Bahrain does not rely on oil. The country