A monograph directed by Tomás Guerrero Blanco and Gonzalo Rodríguez Marín in collaboration with the Spanish Exporters and Investors Club and the Ministry of Foreign Affairs

Casa Árabe hosts the presentation of the report on the EU's economic and business relations with the GCC

photo_camera GUILLERMO LOPEZ/ATALAYAR - Rashid Berd, Tomás Guerrero, Gonzalo Rodríguez and Enrique Fanjul

The countries of the Arabian Gulf concentrate one of the world's most dynamic economies. A constant evolution that makes the Gulf components an attractive destination for many European business sectors. As a whole, the GCC (Gulf Cooperation Council), comprising Oman, the United Arab Emirates, Saudi Arabia, Bahrain, Kuwait, Qatar and Oman, represents a market of 60 million people, a gross domestic product of 1.6 billion dollars and an economy in full modernisation and diversification. 

It is also an economy in which Spanish and European companies have many opportunities, hence the need for a rigorous and precise analysis of the GCC market. The Spanish Exporters and Investors Club has responded to this need with its 'Report on the EU's economic and business relations with the GCC and its implications for Spain', presented at Casa Árabe, the most appropriate place to present the results and conclusions of the report. 

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In the words of Casa Árabe's Director General, Irene Lozano, the presentation at the Madrid-based public diplomacy institution is very timely, given Casa Árabe's role as 'soft diplomacy'. A 'soft power' that plays a very important role in Spain's relations with the Gulf countries, as confirmed by Antonio Bonet Madurga, President of the Spanish Exporters and Investors Club, and the authors of the monograph. 

Tomás Guerrero Blanco, coordinator of the report and director of the Halal Trade and Marketing Center of the Government of Dubai, was the first author to take the floor to give the results of a study divided into five points. 

According to the conclusions of Guerrero Blanco's study, the main problem facing trade relations is the absence of a free trade agreement between the European Union and the GCC. A free trade agreement that the Gulf does have with Asian countries such as Singapore.  The free trade agreement was first proposed in the 1990s, but its development came to a complete halt in 2008. According to Guerrero Blanco, this standstill is currently taking its toll, and according to Blanco, this means that each European country, on its own, is drawing up its own trade strategies with the GCC. 

The treaty is not progressing due to a lack of political stability. As the authors point out, the GCC is experiencing a very stable geopolitical climate, which has not been altered by the war in the heart of Europe. Moreover, in recent years, the Gulf countries have increasingly normalised their relations with Israel, and the differences between the Emirates, Saudi Arabia and Qatar have been ironed out.  "Geopolitical risks have taken a back seat in the region," said Guerrero Blanco. 

Traditional dependence on hydrocarbons is now the biggest threat to the GCC, according to the report's coordinator. It is a dependence that the Gulf states are trying to eliminate through the diversification reforms undertaken in recent years, and in which Spain can play an important role thanks to its developed clean energy sector. 

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Relations with Spain: 

Spain accounts for 6.3% of EU exports to the GCC. It is far behind Italy (14.5%) and France (14.8%). "France and Italy are ahead of Spain and are ahead of Spain because they have been able to anticipate. They have been in the region much longer than us. They have established themselves there and have spent years building relationships of trust with the main actors in the region. Spain has been a 'latecomer' to the Gulf," explained Guerrero Blanco.   

Exchanges have been mainly driven by the hydrocarbon market, something that Spain is trying to reverse by exploring new business opportunities and complementarity. The value of this 6.3 per cent was 4.276 billion euros in 2020, compared to 3.169 billion euros in imports from the GCC, leaving a positive balance in trade. 

According to the report, the COVID pandemic affected the pace of exports, although not all sectors equally. Capital goods lead the Spanish export table, followed by semi-manufactured products, consumer manufactures, food and beverages and finally energy products.

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In these exchanges, Saudi Arabia and the United Arab Emirates are Spain's preferred partners, far ahead of their neighbours. The conditions are essentially the status and openness of their markets to Spanish products. Respectively, Saudi Arabia and the UAE imported Spanish products worth 1.734 billion and 1.5 billion euros respectively. 

Saudi Arabia and the UAE also account for the largest share of Spanish investment abroad. This investment is not comparable to the volume of trade, and according to Guerrero Blanco, it has not yet taken off properly. The aluminium, hydrocarbon and waste treatment sectors have attracted the most investment for development in recent years. These investments were also hit hard by the pandemic, reducing the total annual sum by 56.4 per cent. 

In contrast, the GCC has made significant investments in Spain worth 6,248 million euros in 2019, according to data from the Spanish government. 

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"If there is a country that has historical and privileged relations, not only with the world, but also with the Gulf Cooperation Council, it is Spain. Therefore, I understand that we are in a position to be able to take advantage of these opportunities that we are presenting in the monograph, and that we should have a series of advantages with respect to other European Union countries," explained Guerrero Blanco after his presentation. 

"The European Union has not been able to ratify a free trade agreement, so each country has been developing its own strategy. Spain has a good position in this respect. We have al-Andalus in our assets, which represents the splendour of Islam. Everyone knows where Granada is, where Cordoba is. It is true that we are very much perceived through football or tourism, but they are also beginning to perceive us as a country that can provide solutions to their new needs. And I am talking specifically about the revolution in the energy sector. 

According to Guerrero Blanco, energy is not the only strong point that can be developed in relations, but also food. "These are countries that import 70% to 80% of the food they consume. There are a series of conditions that prevent them from producing many products. Spain, which to a large extent is one of the largest food producers in Europe. Here again we can provide solutions, knowledge, we can be part of the solution to these challenges or scenarios in which these countries need help from third parties". 

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The breakdown of the report given by Guerrero Blanco was followed by a round table moderated by the managing partner of Iberglobal, and specialist in foreign trade, Enrique Fanjul. The panel of experts was composed of Gonzalo Rodríguez Marín, director of the Saudi-Spanish Center for Islamic Economics and Finance, IE University; Rachid Berd, director of the Haramain-Saudi Arabia project at Consultrans; and Tomás Guerrero Blanco. 

The experts addressed issues such as the perception that GCC countries have of Spain. Rachid Berd responded to this question, emphasising how much the Spain brand has grown in GCC countries in recent years. Rodríguez Marín agreed with his colleague on the panel, stating that "Spain's image is very positive in the region, although it is identified more with some sectors than others", in reference to many of Spain's "soft power" strengths. Tourism, gastronomy and football. 

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This "soft power" is, according to the speakers, one of the great assets that Spain should take advantage of in the GCC to strengthen its relations with the sector. "Bring renowned Spanish institutions there to open subsidiaries in the same way that the Louvre or the Sorbonne have done. We have to use football diplomacy, which is one of our strong points," Guerrero Blanco continued his co-author's words. Spanish business must improve its internationalisation, and above all have the support of state institutions to penetrate markets. Collaboration between the public and private sectors is key, according to the speakers at the round table, in order to see strong relations with the GCC countries flourish. "Governments must support their companies abroad, it is necessary," said Guerrero Blanco. 

Finally, and after all the interventions, the Deputy Director General for Bilateral Economic Relations and Economic Diplomacy of the Ministry of Foreign Affairs, Luis Mateos Paramio, closed the presentation event, thanking the experts for their work and giving a very positive assessment of the recommendations offered by the report.
 

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