Since the establishment of the Cooperation Council for the Arab States of the Gulf (Gulf Cooperation Council (GCC)) in 1981, its Member States (the Kingdom of Bahrain, the State of Kuwait, the Sultanate of Oman, the State of Qatar, the Kingdom of Saudi Arabia, and the United Arab Emirates) have pursued economic and monetary integration further to the constituent aim of the Charter of the GCC for regional cooperation.
With that aim, the Economic Agreement of 1981 established a Free Trade Area, operational since 1983, in the expectation that it would promote regional trade creation and, in turn, greater economic and monetary integration among the Member States. However, most of its provisions for an Economic and Monetary Union (EMU) never took effect.
Thus, twenty years after its entry into force, the GCC Supreme Council agreed to revise the terms of the Economic Agreement. The Economic Agreement of 2001 now regulates the economic programme of the GCC.A timetable for the establishment of a Monetary Union was approved at the same time with a proposal to introduce a single currency by 1 January 2010. However, only four of the six Member States (Bahrain, Kuwait, Qatar, and Saudi Arabia) have concluded the Monetary Union Agreement of 2008 and, to date, the single currency remains a proposal only.
The GCC has failed to achieve any significant level of economic and monetary integration: ultimately, the EMU and single currency are yet to materialize. On that premise, the article critiques the scope and effect of implementation of the Economic Agreements of 1981 and 2001 as it examines the origins and development of economic and monetary integration in the GCC.Journal of World Trade