This publication the contains the text of the Economic Agreement Between the Gulf Cooperation Council States (the “Economic Agreement”) signed by their Majesties and Highnesses GCC leaders, on December 31, 2001 (Shawwal 16, 1422 AH) during the 22nd Session of the Supreme Council in Muscat, Sultanate of Oman. The new Economic Agreement contains a comprehe-nsive revision of the original Economic Agreement that was signed in November 1981 (Muharram 1402 AH), which laid down the ground for the economic relationship among Member States and established the GCC Free Trade Area. The 1981 agreement emerged from the economic circumstances prevailing at the time it was drawn up, just a few months after the establishment of the GCC. Similarly, the new agreement is a reflection of the current circumstances of the GCC Member States. The new Economic Agreement furthers the objectives achieved by the 1981 agreement, enhancing and strengthening economic ties among Member Sates, and harmonizing their economic, financial and monetary policies, their commercial and industrial laws, as well as their customs regulations. During the first two decades of the GCC existence, Member Sates succeeded in developing their economic ties to bring them closer to full economic integration and economic unity. The Supreme Council, during its annual meetings, adopted several vital resolutions in the economic field that pushed joint economic action great steps ahead. The most important resolutions have been those relating to the GCC customs union, the common market, development integration, and the economic and monetary union. To provide the legal environment required to cope with these developments, the Supreme Council, in its 20th Session (Riyadh, November 1999), ordered a revision of the 1981 economic agreement to bring it into line with the new developments in GCC joint economic action and to complete the requirements of economic integration among the Member Sates, taking into account the new global economic environment.
To carry out the Supreme Council’s instructions, the Secretariat General was instructed to prepare a draft revised economic agreement and submit it to Member States to propose any addition, deletion or amendment to the provisions of the agreement, after which it was required to submit the revised draft to GCC competent committees. After the preliminary draft was prepared and submitted to Member States for consideration, a technical team was formed from Member States and the Secretariat General to examine the draft agreement in light of Member States’ comments. The team held intensive meetings in February and March 2001 where the proposals and comments of Member States were discussed and the draft agreement was amended accordingly. A Committee of the GCC Deputy Ministers of Finance and Economy was convened in two meetings in April and September 2001 to study the new revised draft. The Financial and Economic Committee (FEC) in its 55th meeting (May 2001), and 56th meeting (October 2001) reviewed the draft agreement as amended by the deputy ministers’ committee. In its extraordinary meeting held in December 2001, the FEC adopted the final draft agreement, which the Ministerial Council (in its 81st Session, December 2001) then submitted to the Supreme Council for approval. Their Majesties and Highnesses GCC leaders signed the Economic
Agreement between the GCC States on 31 December 2001 during the 22nd Session (the Muscat Summit). The agreement is now in the process of being ratified by the Member States and will come into force thereafter. The preparation of the new Economic Agreement was an excellent example of joint work, as a large number of experts from various GCC governmental agencies and the Secretariat General contributed over two years to the preparation and revision of the draft treaty. The technical team assigned to this task and the other committees made great efforts in updating the original agreement, to come up with a text that reflects the achievements of GCC joint economic action in the past two decades and future aspirations of GCC citizens. The new agreement contains new provisions or substantially revised ones that reflect Supreme Council resolutions and directives, as well as new developments in GCC joint work, such as provisions relating to the Customs Union (Chapter I), Common Market (Chapter II), Economic and Monetary Union (Chapter III), Development Integration (Chapter IV), Human Resources Development (Chapter V), Cooperation in the Fields of Scientific and Technical Research (Chapter VI), Transportation, Communications and Infrastructure (Chapter VII). The new agreement represents a new style of GCC joint work as it does not only call for cooperation and coordination among Member States, but goes beyond that to expressly provide for the economic integration among Member States through the adoption of specific programs and workable mechanisms. The GCC working committees and the Secretariat General will follow up the implementation of the agreement according to specific timetables. Chapter VIII contains mechanisms for implementation and follow-up, as well as settlement of disputes that might arise during implementation of the treaty.