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Gulf Summit Paves Way for Trade Deal with Europe - 2001-12-31

The nations of the Gulf Cooperation Council have concluded a two-day summit in Muscat, Oman, with the signing of agreements intended to clear the way for a trade pact with the European Union.

The six Gulf Arab states that make up the Gulf Cooperation Council have agreed to a joint customs tariff of five percent by the year 2003, two years earlier than originally planned, and voted to create a single currency by the year 2010.

Speeding the start of the single tariff on imports is designed to pave the way for a trade deal with the European Union, the GCC's biggest trading partner.

The European Union has insisted that the countries of the GCC - Saudi Arabia, Oman, Kuwait, the United Arab Emirates, Bahrain and Qatar - establish a customs union before reaching a free trade agreement with the European Union.

But the GCC ministers warned they may reconsider the pact if no progress is made in talks with the European Union on a free trade agreement. The GCC and the European Union have been discussing such a deal for 13 years.

The Gulf Arab ministers also approved a plan to quadruple from 5,000 to 20,000 the number of troops in a joint defense force. The GCC has largely depended on the United States and Britain for protection against its more powerful neighbors, Iraq and Iran.

The ministers also called for urgent action by the U.N. Security Council to prevent a flare up in violence between India and Pakistan.