The EU and the GCC: Challenges and Prospects for Cooperation under the French Presidency of the European Union

Posted in Europe , Broader Middle East | 04-Jun-08 | Source: Gulf Research Center

General view of the tenth Gulf Cooperation Council Summit "GCC".

Given the impending French presidency of the European Union, the Gulf Research Center together with the Chair for Middle East and Mediterranean Studies at Sciences Po, Paris and the Policy Planning Staff of the French Ministry of Foreign Affairs organized a one-day workshop on the challenges and prospects for cooperation between the member states of the Gulf Cooperation Council (GCC) and the European Union. The purpose of the meeting was to outline an agenda for GCC-EU relations and focus on specific policy steps that could be implemented under French leadership. The meeting brought together a number of policymakers, government officials, academics and businessmen in order to discuss key questions that should be considered with regard to developments in the Gulf region.

Opening the workshop, Mr. Christian Nakhlé, Middle East Officer, Policy Planning Staff of the French Ministry of Foreign Affairs, emphasized the fact that it was now a favorable time for reinforcing ties with the GCC states as the two regions share economic and security interests. France itself is aware of the available opportunities and committed to provide greater coordination. Similarly both Prof. Gilles Kepel of Sciences Po and Abdulaziz Sager, Chairman of the GRC, noted in their initial statements that it was time to move GCC-EU relations to a higher level and focus on substantive cooperation that goes beyond the economic arena.

The workshop discussion subsequently concentrated on four specific areas that form the core of GCC-EU relations: politics and security; education and culture; economics, trade and investment; and energy issues. Each session was introduced by an EU and a GCC speaker. In the first session on politics and security, it was mentioned that while there is a broad level of cooperation at the bilateral level, the same cannot be said for the multilateral level where cooperation remains very limited. Relations are not what could be expected. This is despite the fact that as far as the GCC states are concerned, there exists both a desire and a need to work closely together with the EU on various issues. For example, while France has conducted an open dialogue with different GCC countries and has negotiated solid security issues, the attempt at multilateral negotiation with Iran through the EU-3 has not produced any tangible results. Similarly, the drawn out negotiations between the EU and the GCC on the Free Trade Agreement are seen as a stumbling block in the multilateral relationship.

In that context, it was argued that it is necessary to move beyond the current state of economic relations and to also focus on political and security cooperation where there is currently a vacuum due to the problematic policies of the United States in the Gulf. It is simply insufficient to think that relations can be furthered by economic ties alone. For the EU, it has to show its determination to get involved in the region and complement the role played by the US. It was mentioned that overall, a greater political commitment needs to be shown especially in light of the fact that the GCC states themselves have become more active in regional security discussions, for example in Lebanon and in the Palestinian issue, and have held detailed talks with NATO on the Istanbul Cooperation Initiative (ICI). Given that under the French EU presidency, the project of the Union for the Mediterranean will be a central component, it was suggested that the profile of the GCC states in the development of the project could be raised in light of the interconnectedness of regional labor markets and the important role the GCC could play in reinvigorating European markets. This is seen as one area that could help reinforce EU-GCC ties. Other areas mentioned included a GCC-EU position on the future US policy in the region, greater coordination on policies towards countries such as Afghanistan, Yemen and Pakistan, as well as a clear commitment to the security of the Gulf region beyond the declaratory statement within the ICI proposal.

A second important area for consideration in the broadening of the GCC-EU relationship is the education and culture sectors. This was seen by the majority of the participants as the critical area to focus on given the long-term implications and its wide impact on the development of societies on both sides. From the EU side, there has been an effort to institute a variety of measures to foster strong ties, for example, the Bologna Process in order to create curricula at the European level with increasing student mobility and easier credit transfer, the Erasmus Mundus scholarship program, the TEMPUS program for capacity-building and the Jean Monet Chair for European Studies. Yet, it is clear that current initiatives are insufficient and a greater effort can be made to foster strong people-to-people links and enhance the establishment of knowledge-based societies. Limitations from the EU side include the fact that universities in Europe do not consider themselves as service providers and that the field of education remains very much a national prerogative where policies cannot be dictated at the EU level. This constitutes a true challenge to this aspect of EU-GCC relations as the Gulf is used to American universities whose attitudes and practices are very different. Another obstacle lies in the inadequacy of some mechanisms such as the grants provided by the EU to Gulf students, which tend not to cover undergraduate students. It was proposed that twinning programs, the implementation of a one-year transition period for GCC students, or joint ventures between international and local schools could overcome some of those problems. In addition, the European Commission has invited the GCC states for an information day on the role of education in economic growth and competition in October 2008. Furthermore, a variety of education projects are being developed for 2009 backed by already programmed funds. Thus, while there are prospects for ! concrete actions, both sides need to come together to make them successful.

Economic and trade relations dominated the discussions of the third session. It was clearly argued that the GCC economies cannot be overlooked in terms of their role in the world economy. Already as far as current financial imbalances are concerned, the GCC countries are emerging to be as important as China and Japan. In regards to Sovereign Wealth Funds (SWFs), it was acknowledged that a degree of public anxiety in Europe does exist and that not everyone within the EU speaks with the same voice. To counter this sentiment, more clarity on the topic is needed and SWFs should be portrayed for what they are – as a positive fund for the global economy. At the same time, one should be clear that while transparency should be encouraged, such stipulations should also be extended to other funds such as hedge funds and private equity firms. Outside of the issue of SWFs, it was suggested that the Gulf States should be included in meetings such as the G8 and that the EU should put this on the agenda. In addition, there is a critical role that the GCC states can play when it comes to less developed countries (LDC) both in terms of financial assistance but more importantly, in areas such as technical expertise, development of infrastructure and promoting food security.

In reference to the EU-GCC negotiations on the Free Trade Agreement, it was mentioned that the important issues in the talks have been resolved and that a successful conclusion of the agreement is finally within reach. It was thus important to set out a list of priorities for discussion in the aftermath of the negotiations in particular as it was seen as necessary to instill some new credibility and confidence in the relationship. The areas of future cooperation that were identified include the removal of trade and investment barriers on both sides; the creation of effective mechanisms to manage competition in the service sector; the resumption of an economic dialogue upon conclusion of the FTA; and fostering further cooperation on research and development as well as on environment and climate change. In all these areas, however, it was mentioned that a real limitation for success was the shortage of funds allocated to such projects.

The final session discussed energy security issues shared by both regions. As far as EU is concerned, the main long-term security issue was identified as being electricity generation which is not a geographical threat but rather a question of capacity and/or willingness to increase production. A renewed dialogue between the producers and the consumers is thus seen as crucial in resolving this issue; in addition, the dialogue could focus on such areas as renewables and promoting energy efficiency. It would be particularly important to work on those areas that are not controversial or contentious while maintaining dialogue to reduce misunderstanding and creating transparency as a basis for policy actions.

The GCC states, on their part, can provide improved energy security to the EU through the provision of expanded and diversified oil and gas exports including closer cooperation between National Oil Companies (NOCs) and International Oil Companies (IOCs); promoting a partnership in Petroleum Research & Development (R&D) Centers by focusing on cleaner and more efficient upstream and downstream new technologies; and a joint program and funding when it comes to carbon capture sequestration.

In the final session, the priorities of the French Presidency to the EU were elaborated upon. This includes ensuring the ratification of the Lisbon treaty by January 2009 and setting the stage for the European Parliament election scheduled for the spring of 2009. In terms of issues, energy and the environment, immigration, defense and agriculture were identified as key areas. In particular as far as energy, environment and defense are concerned, a close dialogue with the GCC was seen as important. The Union of the Mediterranean would, of course, also be at the center of cooperation with the Gulf region as there is a desire to incorporate more governance from all parties involved. Finally, it was mentioned that European policy was important with regard to Iran and that here the French presidency would certainly be active.