Turkey and Gulf states negotiate free trade agreement

The Gulf States and Turkey have launched the first phase of negotiations to establish a free trade agreement. The meetings in the Turkish capital marked a significant effort to forge a future partnership that will cover a range of areas between the parties. 

As reported by Al Arab, analysts have been watching closely as the six countries in the Gulf region seek to open new avenues to boost their economies in the coming years by forging strategic trade partnerships with Turkey. These initiatives could be a prelude to more significant agreements in the near future.

Turkey, on the other hand, aims to build solid foundations with these countries after a period of stagnant relations caused by unconventional policies that have negatively impacted its economy. The initial round of negotiations covers issues such as trade in goods and services, investment, rules of origin, technical barriers to trade and sanitary measures. This demonstrates the interest of the participating nations in developing a strategic partnership.

The objective of this first phase is to agree on the principles that will govern the negotiations on the above issues, as well as to set the framework for future rounds and their desired objectives, with the intention of concluding the negotiations as soon as possible. 

Negotiators also seek to exchange information and data, discuss trade challenges and opportunities, and build trust and collaboration by identifying areas of cooperation and joint coordination. This will pave the way for a final and comprehensive agreement in the next rounds. 

In March, the two sides signed an agreement to launch these negotiations, underlining the harmony achieved in the region to achieve economic integration and strengthen trade and investment relations with valuable partners in the markets.

The agreement is expected to provide preferential advantages for the access of local products to the markets of all parties, through the liberalisation of most goods and services. In addition, it will facilitate, encourage and protect investments, increasing the volume of trade and promoting economic growth in the member states.

This is the first agreement of its kind to be signed by the GCC this year, following agreements with South Korea and Pakistan in 2023, as part of a strategy to strengthen trade and investment relations with important economic partners in Asia.

The final agreement, after months of negotiations, is expected to result in one of the world's largest free trade zones, with an estimated total value of $2.4 trillion, covering a population of 142.6 million people. 

Official data indicate that the volume of trade between the Gulf countries and Turkey exceeded 26 billion dollars last year. The United Arab Emirates leads the region in trade with Turkey with approximately 19 billion dollars, followed by Saudi Arabia with 5.6 billion dollars. Oman ranks third with approximately 1.4 billion dollars, closely followed by Qatar, Kuwait and Bahrain.

Turkish President Recep Tayyip Erdogan declared last July, ahead of his Gulf tour, that the volume of bilateral trade between Turkey and the Gulf states had increased from 1.6 billion dollars to approximately 22 billion dollars over the past two decades.

The Gulf territories are eager to move forward rapidly in their economic transformation process, especially in a changing global context that requires establishing long-term partnerships and maximising opportunities to maximise trade and increase openness to investment. 

Free trade agreements provide solid foundations to ensure large and robust markets for goods and services, with the tariff exemptions offered by the Gulf countries and the greater openness sought by many markets and blocs such as the ASEAN group. 

With improved relations, countries in the region are keen to cooperate with Ankara to help develop local industries and transfer technology, as part of their ambitious strategy to diversify their economies beyond oil.

For its part, Turkey now sees the Gulf region in a new light, following the restoration of diplomatic relations after years of estrangement due to policies that did not match the positions of some countries in the region, notably the United Arab Emirates, Saudi Arabia and Bahrain.

Over the past decade, Ankara has maintained a particularly close relationship with Qatar, while seeking to balance its ties with Kuwait and Oman. After a period of tensions, Turkey has embarked on a diplomatic strategy to improve its relations with Gulf countries, especially the UAE and Saudi Arabia, reaching significant agreements that reflect a renewed interest in strengthening regional cooperation.