The proposed EU-GCC Strategic Partnership which was announced in Brussels on 18 May was a year in the making. It sets out a number of key policy areas where the EU seeks to work more closely with the Gulf States, including energy and the green transition, trade and economic diversification, digitalisation, and security. The statement issued with the Partnership also mentions humanitarian and development challenges in the Gulf region and states that the EU is a strong defender of social transformation and human rights. This initiative represents a new approach to collaboration with the Gulf States, following the suspension in 2008 of the talks aimed at establishing an EU-GCC Free Trade Agreement.
Will this new approach work? It is easy to see problem areas that might disrupt talks between the two sides. The Gulf States’ economies still depend heavily on fossil fuels, something that the EU is striving to get away from. There is the war in Ukraine, on which there are very divergent views. The war is of huge importance to Europe and will in all probability distract the EU from other plans for some time. Iran is another contentious issue, where the EU is much keener that some of the Gulf States to see the JCPOA renewed. This will not be a topic to be included in the EU-GCC partnership talks, but it could also be a major distraction. Ongoing issues like human rights, women’s rights and cyber surveillance will also have to be navigated. European governments will not give up their close interest in these and the EU will insist on having a dialogue about them.
Britain has its own plans for economic cooperation, but prefers to go it alone. The government launched talks on a proposed Free Trade Agreement with the GCC last October. It is less ambitious than the EU plan, and is aimed principally at selling British goods and services to the Gulf States and boosting investment and jobs in the UK. The Gulf States have welcomed this initiative while cautioning that an FTA will take some time. It will be interesting to see which approach will be more successful.
The EU however sees advantages in establishing a partnership over a very wide range of sectors with the GCC states. On the fossil fuel issue, there could be a grand bargain since many EU countries now urgently need oil and LNG, as a consequence of the embargo on Russian energy supplies. If the GCC states can assist in the short-term, European countries could work with the GCC in slower time on developing green hydrogen and renewables and assisting them in lowering their dependence on hydrocarbons. Of all the Gulf countries, the UAE generates the highest percentage of its energy from renewables, but the Saudis, Emiratis and Qataris all see the need to be part of the transition to green energy, and have set ambitious targets to do so. They are also aware that the EU states can move quickly over energy supplies if they have to. There is scope for close cooperation here.
Other areas where the EU can work with the GCC include the environment and combating climate change. The timing is good, since Abu Dhabi will be hosting the international climate conferenceCOP28 in November next year. The recent severe sandstorms in northern Arabia, which occasionally blew down as far as the Lower Gulf, the sharply rising demand for desalinated water in the region, and the need to grow more food locally, are three areas where European experience and technology can assist. The Strategic Partnership could lead to wider cooperation and get away from the old pattern where Europe buys fossil fuels from Arabia and sells goods and food in return.
The EU can also assist the GCC states in key areas like education, both academic and technical. One of the Saudi and Emirati governments’ main challenges is providing jobs for young people, which means greatly expanding the private sector and boosting entrepreneurship. This is a problem which affects the whole Arab world. The EU is the largest and most sophisticated market adjacent to the Arab region and this makes the proposed partnership a real opportunity for economic cooperation, and creating a genuine two-way street.
Admittedly the EU partnership plan is more wide-ranging and more complicated than the UK’s project. Progress will be slow. Europe will be preoccupied in the coming months with energy shortages caused by the war in Ukraine and with finding a new modus vivendi with Russia. However the impetus for EU-GCC cooperation is very much there. It is, in the larger picture, unfortunate that Britain is not cooperating with Europe, given her long history in the Gulf region, but strains over Northern Ireland and the lack of a solid cooperation framework with the EU post Brexit, mean that neither side is thinking of coordinating their collective efforts any time soon.
Even if Britain negotiates an FTA with the GCC, it remains the case that the EU through its size and strong existing trading links with the GCC, has more ability to empower GCC citizens and the Gulf private sector in particular. Britain still has considerable soft power in the region, particularly in the smaller Gulf States, but lacks the close dialogue with the Gulf leaders that she once enjoyed. British Ministers and officials change frequently and in my opinion, as a diplomat and businessman in the Gulf region for over five decades, the British leaders are no longer close confidants of the Gulf Sheikhs.
EU countries, like Germany, France, Spain and Italy have considerable soft power too, as they showed in their participation around Dubai Expo 2020. They do not rely on supposed historical links nor do they take the Arabs of the Gulf for granted. This perhaps helps them in their efforts to project themselves as partners of the Gulf States. The UK, in its now detached international position, and having neglected its Gulf friends in recent years, will have to work harder if it is to compete with the major economic powers like the US, China and the EU.