Underscoring the relevance of relations between the member states of the Gulf Cooperation Council (GCC) and the European Union (EU), the Gulf Research Center and the Bertelsmann Foundation, in cooperation with the German Federal Foreign Office, brought together policy officials, academics and specialists to identify concrete steps that can be undertaken to propel the relationship between the two sides forward. Underlying the free exchange of ideas was the recognition that the GCC-EU relationship was one of growing importance to both sides and that under the EU presidency of Germany and the GCC presidency of Saudi Arabia, there were new possibilities and a determination to bring greater substance for the mutual benefit of both the GCC and the EU.

Focusing on four key areas – finance, energy and water, political and security dialogue, and education – the meeting was aimed at providing practical suggestions that governments could deal with to promote better understanding and greater cooperation. Much of the discussion stressed the need for bringing the negotiations over the GCC-EU free trade agreement (FTA) to a conclusion as soon as possible. In addition to the remaining technical issues that still need to be resolved, there was agreement that both sides need to also look into the actual implementation of the FTA once the agreement is reached by both sides. Yet, the discussions stressed that the failure to conclude the negotiations, despite numerous announcements that such an agreement was close to being finalized, had impacted the overall credibility of both the EU and the GCC to underpin their relationship with actual achievements. Thus, while the 1988 Cooperation Agreement identified numerous areas of potential cooperation, none of these had materialized in light of the ongoing FTA negotiations and had in fact been subordinated to its progress. It was seen as imperative that an agreement is concluded quickly.

From the European side, it was stressed that a strategic partnership with the GCC exists and that there was a strong commitment in furthering relations. The upcoming visit of German Chancellor Angela Merkel to three GCC member states was cited as evidence of this dedication. Similarly, the GCC side argued that the EU as an institutional actor was not only accepted, but also wanted and needed. In this context, the EU offers the Gulf region the possibility of a strategic vision that could prove instrumental in ultimately overcoming many of the challenges and instabilities which confront the Gulf. Given the current fragile security environment which includes suspicion about Iranian intentions, the fear about implications from the continuing Iraq crisis and the GCC States’ lack of faith in current US policies, it was specifically mentioned that the EU could not afford to sit around and wait for additional consequences to materialize. Instead, active EU involvement in regional issues was seen as essential and urgent.

Expert presentations on key areas of cooperation were given from both a European and a Gulf perspective. In terms of money and finance, it was mentioned that a successful FTA would not only foster greater economic integration between the two sides but also strengthen the broader financial ties. As far as the Gulf is concerned, however, successful trade integration also requires the establishment of reliable legal frameworks in addition to the further development of non-oil industries. On these fronts and also with regard to bringing about the key GCC projects of establishing a common market and a common currency, the EU can serve as a successful role model including the introduction of convergence criteria, the design of proper monetary and fiscal policies and the necessary technical preparation that would be necessary. Other specific suggestions put forward for consideration included liberalizing the respective investment environment with regard to areas in which each side enjoys a comparative advantage such as the GCC in petrochemicals and energy-related industry and the EU in manufacturing and financial services; the further expansion and resumption of various economic dialogues also in regard to the private sector and the research community; and the resumption of business-to-business forums for business leaders outside the already existing trade exhibitions.

With the debate over energy security having assumed particular importance recently as far as Europe is concerned, it was pointed out that a fundamental convergence between the GCC and the EU currently exists regarding an average price of about $55 for a barrel of oil. As OPEC’s share of global oil reserves is already close to 80 percent and as non-OPEC supplies begin to decline, it will mainly be the GCC and other Gulf countries that will assume the rising share in the expanding global oil trade. This in particular points towards the need of the GCC and the EU to explore cooperative aspects in the field of energy.

Here, the discussion produced numerous specific policy proposals ranging from EU encouragement to have GCC crude oil traded freely; the management of strategic energy stocks with the EU bearing the costs for establishing storage facilities in exchange for GCC “deposits”; investment in various logistic projects including pipelines; the establishment of a joint EU-GCC energy technology center to undertake joint collaborative projects; and the creation of a joint EU-GCC board to promote private energy services in the GCC States. Furthermore, it was argued that much more could be done in the field of climate policy ranging from promoting alternative sources of energy, exploring the feasibility of nuclear power generation in the GCC countries and bringing about a partnership on carbon capture and sequestration. The inclusion of the GCC in the successive frameworks of the European Commission’s Directorate for Research should also be actively pursued.

While the EU’s relationship with the GCC States has been dominated by economies ties, the political and security dialogue between the two sides has gained increased relevance in recent years. With terrorism, Iraq, the Iranian nuclear file, Lebanon and the Palestinian issue being at the forefront of international concern, much of the discussion focused on the role the EU could play to assist in bringing about greater stability in the fragile Middle East.

All participants agreed that time is indeed short and that there was a need for the EU to break out of its comfort zone and become more pro-active in the region. This included a call for a combination of both immediate action and a long-term strategic vision around which both sides could orient themselves. From the EU side, it was pointed out that dialogue structures as they exist at the moment do have their limits and that one should not look at the EU as the one organization that has all the answers to the regional problems. As such, it would be necessary to push forward with an additional effort to identify the exact contours of the so-called “strategic partnership” and to begin a prioritization project by which items which demand immediate attention can be identified. Nevertheless, it was mentioned that the EU needs to also engage the GCC States more effectively in terms of some of the initiatives coming from the region and also that the EU needs to promote its policies through more effective public policy methods. All in all, the EU is seen as offering some substantial benefits to the region and also as providing an alternative approach to some of the disappointing US policies of the past few years.

The final focus of the meeting was on the area of education where in the past mutual misconceptions and the human development needs of the GCC states have failed to build on significant opportunities that exist. While the Gulf education sector is indeed expanding quite rapidly, there is still only limited attention for European studies in addition to very limited opportunities for Gulf studies in Europe. Part of the reason cited was also the EU’s neglect and or unwillingness to contemplate funding initiatives via the GCC. Nevertheless, the meeting provided a number of possibilities on both the tertiary and secondary levels including twinning programs between EU and GCC universities, the development of distance-learning structures, to have one major European University institute in each of the GCC states, and the idea of promoting greater teacher training projects. One particular concept was to consider re-starting the Gulf Studies/European Studies project that had been close to implementation at the end of the 1990s. In order to avoid this becoming a funding issue, a dedicated fund could be established to receive contributions from EU, GCC as well as private sources. Finally, it should be possible to establish a working group that could report on progress within a specified timeframe. 

There was no doubt among the participants that this might indeed be an opportune moment to invest more time in looking at the substance of the current EU-GCC relationship. Without a doubt, the recognition within the EU of the ever increasing role that the Gulf region plays when it comes to issues of peace and security, energy and economic development is a welcome trend that needs to be further solidified. Within the Gulf, the GCC states are an important dimension and to limit the interaction simply to the signing of a FTA would be short sighted indeed. Meanwhile, the determination by Germany, as the EU’s president, to break out of the present mold left room for optimism that greater achievements could still be attained.