Free Trade Agreements in the GCC and Practical Challenges

Proceedings of The 9th International Conference on Modern Research in Management, Economics and Accounting

Year: 2019


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Greater Arab Free Trade Area and practical challenges 

Atia Hussain



The Gulf Cooperation Council (GCC) member states including Kingdom of Saudi Arabia, United

Arab Emirates, Kingdom of Oman, Bahrain, Kuwait and Qatar being part of various Free Trade Agreements (FTA) benefit from the preferential rate of customs duty for trading the goods among the member states. In theory, these FTAs provide customs duty benefits to the trading parties subject to the fulfillment of FTA specific conditions e.g. local value addition rule, transportation of goods, preferential origin of goods and direct invoicing between the respective member states. However, in practice the multinational businesses with global footprints face practical challenges whilst availing the preferential customs duty benefits from these FTAs. The challenges arise from the interconnected rules and regulations, which form the criteria for availing the benefits of the FTAs e.g. in case of triangular transactions. There are ongoing discussions among the relevant GCC governmental authorities to resolve these challenges at the member states level. This paper aims to articulate the practical challenges and present possible options to mitigate these challenges, which can facilitate the businesses to avail the preferential customs duty benefits.

Keywords: Greater Arab Free Trade Agreements; triangular transaction; direct invoicing; certificate of origin; value addition.