Academic journal article World Review of Political Economy

The Analysis of Eu-Gcc Potential Free Trade Area Agreement through Eu-Gcc Actual Steps (1995-2012)

Academic journal article World Review of Political Economy

The Analysis of Eu-Gcc Potential Free Trade Area Agreement through Eu-Gcc Actual Steps (1995-2012)

Article excerpt

1. introduction

This article assesses the rationale and interests behind regional integration and also the signing of free trade area agreements (FtAs) in the age of globalization as they pertain to the European Union (EU) and to the Gulf cooperation council (Gcc) (Appendix). In response to globalization, the EU was designed as a tool to Europeanize Europe with a new set of foreign policies to conduct external relations. Unlike the 1970s oil boom, Gcc countries are nowadays seeking if I may put it Gulfinization of its external relations along with economic development, diversi- fication, and sustainability.

Ever since 1989, the EU and the Gcc regional blocs have had a strong urge to sign an economic partnership in the form of a FtA and with many different negotiations that have lasted for almost 20 years, they have utterly failed to do so. the main objective of this research is to analyze whether the long-awaited EU-Gcc FtA will be beneficial and compatible to both sides or not. the research highlights the importance of having strong regional bloc integration where developed countries such as the EU should support and cooperate with less-developed countries and/or relatively weaker regional blocs such as the Gcc countries in an equal manner.

This article is distinguishable because it clarifies the importance of engaging into different multidisciplinary approaches to understand the EU-Gcc FtA. First, an International Political Economy (IPE) approach was used to analyze the potential FtA of the EU and Gcc, and this approach on its own is a new one that has not been used for this specific topic. Second, it analyzes the different political and economic literature and theories related to regional and international bloc integration. third, it theorizes and supports the marxist theory of knowledge that member states decide whether to cooperate with one another or with other regional blocs after conducting a cost-benefit analysis of the conditions that may warrant coordination and whether the pursuit of the cooperation will truly facilitate or complement or diverge away from their economic motives. It goes beyond the reasons behind the hindering of signing this FtA and focuses more on economic globalization.

So, the big question to be answered is whether regional bloc integration is a prerequisite for international FtAs or not and whether it leads to economic development or not.

1.1. Methodology

A qualitative comparative analysis through an IPE approach was used in this article. this was conducted by (1) analyzing the different political and economic literature and theories related to regional and international bloc integration; (2) analyzing the current global EU and Gcc relationships; (3) comparing various trade gravity econometric models conducted by various econometricians in the lights of the probable effects of the EU-Gcc FtA; (4) assessing the effect of policies on trade flows through a SWOt (strengths, weaknesses, opportunities, threats) analysis.

1.2. Brief Overview of EU's Low Involvement in Foreign Policy in GCC

Historically, there was interchangeably low involvement in foreign policies from both the EU and the Gcc usually explained by the dual perception that the USA was the main sphere of influence. most of the European states except for the UK do not have a history in the region which they disregarded until the first oil crisis of 1973 outstandingly revealing Europe's vulnerability and dependency on oil and its geopolitical exposure to the negative spillover of the middle East conflict. Furthermore, the EU did not have the capacity and/or capability to affect social, economic, or political changes in the Gulf. the Gcc member states were prone to engage in stronger relationships with the USA since it was one of the main countries interfering and aiding Kuwait during the Gulf war. In other words, the nature of the EU-Gcc relations was conducted on a bilateral basis by individual European countries involved in military sales, infrastructure projects, and trade. …

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