Bumpy road ahead – how to make use of the EFTA-GCC Free Trade Agreement

Add-ons to the extensive free trade agreement network of Switzerland are always a reason for excitement, both on the side of its initiator/negotiators as well as on the side of the trade community. New markets and opportunities act as a powerful catalyst to economies and entrepreneurial spirit, too.

When, however, excitement turns into struggle, the landscape changes. Let us look at the current status of the long-desired FTA with the GCC and how it stands.

The trade community including freight forwarders‘ associations have long signaled that the preferential treatment laid down in the FTA have been of no avail so far. The primary reason for unsuccessful reliance thereon was mentioned to be the reluctance for acceptance from customs clearance officials in the GCC. Associations representing their members have been collecting the notifications and issued recommendations to facilitate smoother day-to-day trade.

Apart from the above, the Swiss negotiating partner has initiated a number of steps to resolve the issue. The State Secretariat of Economic Affairs has arranged and participated in several meetings, the first of which took place in January 2015 in Muscat with the joint committee established under the FTA to resolve disputes. The topic has also been addressed to the representatives from the GCC states at the World Economic Forum in Davos in January 2015. The Secretary of State has further visited several GCC states between 14 and 19 February 2015 and has met with high-ranking representatives, requesting a prompt solution.

The GCC states quoted certain technical difficulties associated with the application of the EUR.1 origin certificates as the reason for the FTA not being adequately applied. Nevertheless, the GCC states have also declared their increased focus on efforts to resolve those difficulties and on applying the FTA from 1 July 2015.

Further meetings have been announced between the parties involved, the next coming up in April 2015 among the EFTA and GCC states on the topic. The aim of the EFTA states is to support the GCC states in the application of the FTA in fastest pace.

Insha’Allah the joint efforts will lead to the successful elimination of roadblocks, whatever their nature may be. As the hot season and major festivities are about to set in in the GCC, the trade community awaits the tangible outcome with great interest. After all, a tree begins with a seed, as the saying goes  –  أول الشجرة بذرة

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