Trade threatens to become the latest flashpoint in the economic and strategic rivalry between Riyadh and Abu Dhabi and risks adding to tensions in the six-nation Gulf Co-operation Council after Saudi Arabia imposed new tariffs on imports from its neighbours.
The levies, which came into force this month, range from 3 to 15 per cent and apply to products made by any company based in its Gulf neighbours whose workforce does not include 10-25 per cent of that country’s nationals. Riyadh said the move was aimed at stopping its industries from being undercut by cheap foreign labour.
But it rides roughshod over the GCC’s customs union, under which most products from non-GCC nations are subject to a 5 per cent tariff and trade between GCC members — Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman — is mainly tariff free.
Lines of trucks have been backed up at the Saudi-UAE border as logistics operators struggle with new paperwork, including a form requiring importers to the kingdom to provide proof of their location and labour force composition.
“This has blindsided us; the requirements are impossible,” said one executive with a Dubai-based family-owned conglomerate. “This is the end of the GCC — what’s the point?”
No comments:
Post a Comment