RIYADH (Reuters) – Gulf Arab countries are expected to abolish a 5 percent steel import duty within one to two months to ease a supply strain mostly felt in Saudi Arabia, an official from a regional Gulf bloc said on Saturday.
Finance ministers from the six-nation Gulf Cooperation Council (GCC) examined the proposed measure at a meeting on Saturday. A final decision is expected at a summit next week.
“There is consensus among GCC countries about this proposal. It will be approved without any problem but it will probably take a month or two for it to be implemented,” an official from the GCC secretariat told Reuters before the meeting.
Saudi Arabia and five other Gulf Arab countries including Qatar, the United Arab Emirates and Kuwait have formed a GCC customs union which imposes a common external tariff for products imported from outside their bloc.
GCC’s Secretary General Abdulrahamn al-Attiyah said the finance ministers agreed to the custom duty abolition — which would also extend to cement imports — but did not set a timeframe for its implementation.
“This issue was discussed extensively and there is consensus among all ministers on the priority of … working towards achieving all the requested abolitions,” Attiyah said.
After a relative lull, steel demand began soaring in the second half of 2009 in Saudi Arabia, fuelled mainly by massive state spending by the world’s top oil exporter on infrastructure to diversify the economy and counter the effects of the global economic downturn.
The finance ministers also discussed proposals from Qatar to set up a regional bank for international aid and a Bahraini proposal to set up a stabilisation fund to aid troubled GCC economies should the need arise.
The meeting will set the agenda for the GCC summit in Riyadh next week.
“There is no consensus over these two proposals. The monetary union council should decide whether there is a need for a stabilisation fund,” the official said.
“As for the Qatari proposal, there are some voices within GCC that question the need for a new aid institution.”
Saudi Arabia is home to the Islamic Development Bank while Kuwait hosts the Arab Fund for Economic and Social Development.