Gulf states plan to scrap steel duty
Riyadh, May 8, 2010
Gulf Arab countries will abolish a 5 per cent import duty within one to two months to ease a supply strain that has been mostly felt in Saudi Arabia, an official from a regional Gulf bloc said on Saturday.
Finance ministers from the six-nation Gulf Cooperation Council (GCC) will examine the proposed measure at a meeting later on Saturday.
'There is consensus among GCC countries about this proposal. It will be approved without any problem but it will probably take a month or two for it to be implemented,' an official from the GCC secretariat told Reuters before the start of the meeting.
Saudi Arabia and five other Gulf Arab countries including Qatar, the United Arab Emirates and Kuwait have formed a GCC customs union which imposes a common external tariff for products imported from outside their bloc.
After a relative lull, steel demand began soaring in the second half of 2009 in Saudi Arabia, fuelled mainly by massive state spending by the world's top oil exporter on infrastructure to diversify the economy and counter the effects of the global economic downturn.
The GCC finance ministers are also discussing proposals from Qatar to set up a regional bank for international aid and a Bahraini proposal to set up a stabilisation fund to aid troubled GCC economies should the need arise.
The meetting will set the agenda for an upcoming GCC summit due to be held in Riyadh next week.
'There is no consensus over these two proposals. The monetary union council should decide whether there is a need for stabilization fund.
'As for the Qatari proposal, there are some voices within GCC that question the need for a new aid institution,' the official said.
Saudi Arabia is home to the Islamic Development Bank while Kuwait hoss the Arab Fund for Economic and Social Development. – Reuters