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GCC is an acronym for the Gulf Cooperation Council for the Arab (Gulf Cooperation Council, 2012). The cooperation is a framework that unites the Gulf regional states of Saudi Arabia, Kuwait, Bahrain, United Arab Emirates, Qatar and Oman. The GCC basic objective is to promotion, coordination, integration and interconnection among the member states in terms of economy, finance, trade, customs, tourism, agriculture, science and technology, mining and legislation. This aims at strengthening ties and cooperation in private and public sectors of the member states (Gulf Cooperation Council, 2012).
GCC common market
The GCC common market is an economic integration that seeks to promote economic linkages among the member states. The agreement gives the citizens from the member states equal rights to employment, healthcare, education and participation in stock markets trading, establishing companies and trade of properties (Oxford Business Group, 2008). The common market facilitates free movement of labour and capital among the six member states. The member states also agreed on removal of trade barriers to facilitate the free movement of goods and services between member states with an aim of encouraging interstate commerce (Oxford Business Group, 2008).
The GCC common market has a positive effect on trade in the region. The framework has the potential to expand trade up to three to four times above the levels that existed before the common market was established. At the same time, the common market is expected to boost international trade. The removal of interstate trade barriers by the common market opens the entire block to international trade because there is only one entry point for trading (Oxford Business Group, 2008). This is likely to increase direct foreign investment in the region. The common market is also expected to encourage member states to diversify greatly to benefit from the block trading boom.
Additionally, the companies take the advantage of the free market to merge and amalgamate. The acquisitions and mergers are crucial in eliminating transaction costs, which reduce the cost of commodities. This works at the advantage to importers who source the goods at affordable prices (Oxford Business Group, 2008).
GCC customs union
The GCC member states have unified customs regulations and procedures that contribute to enhancement of cooperation among member sates (Low & Salazar, 2011). The regulations establish common external custom tariff and custom regulations. The agreement also eliminates all tariffs and nontariff barriers and gives consideration to agriculture and veterinarian quarantine. Furthermore, the customs regulations have rules that address prohibited and restricted goods in the economic block. The regulations require the treatment of any member state’s goods as national goods by another member state (Low & Salazar, 2011). The regulations have also considerably reduced the flow of counterfeit and prohibited commodities between member states. This is extremely beneficial for businesses because the products usually affect business to greater extents.
The custom regulations are of significant importance because goods move freely across the member states without being subjected to extra duties. Majority of the industries in member states benefit from these regulations because they can freely source for labour and vital raw materials without paying the cross-border taxes and levies. The free flow of manufactured products among the member states catalyses business growth in the region (Low & Salazar, 2011).
The GCC has successfully contributed to robust business growth in member states. The elimination of trade barriers and tariffs has a positive impact on business growth. Full implementation of the GCC regulations is necessary to maintain the positive step in trade of the region. The regulations and rules should be strengthened to improve trade and economic integration in the region.
Gulf Cooperation Council 2012, Gulf Cooperation Council. Web.
Oxford Business Group 2008, The report, Oxford Business Group: Oxford.
Low, L & Salazar, L C 2011, The Gulf Cooperation Council: A rising power and lessons for ASEAN, Institute of Southeast Asian Studies: Singapore.