tHe analysis of eU-Gcc Potential free trade area aGreement tHroUGH eU-Gcc actUal stePs (1995–2012)

Abstract

The objective of this article is to find out whether strong regional bloc integration of both the European Union (EU) and the Gulf Cooperation Council (GCC) will lead to “stumbling stones” or “building blocks” steps in the signing of the long-awaited EU-GCC free trade area agreement (EU-GCC FTA). A qualitative International Political Economy (IPE) comparison between the two blocs is discussed and summarized in a SWOT (strengths, weaknesses, opportunities, threats) analysis framework. Results show that the Marxist school of thought is the most realistic of all schools in terms of explaining economic regional integration and international FTAs. For the GCC, the potential outcomes of an EU-GCC FTA mean an increase in trade creation, economic welfare, and a fulfillment of economic desires. For the EU, the FTA will lead to EU trade diversion and a mild increase in economic welfare; however, it will allow the EU to fulfill its self-interest in maintaining running its global position in world affairs. The EU should outweigh its benefits toward this FTA, understand the strong competitive advantage found in the GCC countries, and try to cooperate with the GCC in an equal way, supporting developing countries and avoiding the unfair effects of external yet influencing factors that affect such a relationship.