ASEAN-GCC cooperation: Fully feasible, "the right people, at the right time"

Although the GCC is somewhat "strict" in implementing FTAs with many countries or regions, Arab Gulf region expert Narayanappa Janardhan believes that ASEAN-GCC cooperation is very feasible at the present time.

Overview of the ASEAN-GCC Summit. (Source: VNA)

Both sides are ready to restart.

In a recent article on the Syndication Bureau website, Dr. Narayanappa Janardhan, Director of Research and Analysis at the Anwar Gargash Institute for Foreign Affairs in Abu Dhabi (United Arab Emirates) and a member of the Gulf States Institute in Washington, provided an analysis of ASEAN-Gulf Cooperation Council (GCC) cooperation in the current international context.

According to Dr. Narayanappa Janardhan, after more than two decades of cooperation with little progress, GCC-ASEAN relations are ready to restart.

Annual merchandise trade between the GCC and ASEAN reaches approximately US$110 billion. After China, India, and the European Union (EU), the GCC is ASEAN's fourth largest trading partner.

However, Dr. Narayanappa Janardhan argues that this figure is still not commensurate with the actual potential. With a combined GDP of approximately US$5.5 trillion, bilateral trade between the GCC and ASEAN could grow significantly as economic diversification in both regions accelerates.

Dr. Narayanappa Janardhan highlighted the potential foundations for this growth, including the Comprehensive Economic Partnership Agreement (CEPA) already signed between several member countries of the two blocs and the potential for future free trade agreements (FTAs).

According to Dr. Narayanappa Janardhan, the recently signed Memorandum of Understanding on the “India-Middle East-Europe Economic Corridor” will open up new trade opportunities, strengthen energy resource supply channels, and improve digital connectivity. Similarly, the “ASEAN Connectivity 2025” plan also promotes competitiveness, inclusiveness, and community within and outside ASEAN.

Expert Narayanappa Janardhan argues that the vibrant markets of the GCC and the economic diplomacy among GCC members are also compatible with the ASEAN mechanism. This will facilitate new cooperative relationships between national investment funds in both blocs.

"However, many obstacles remain, the biggest of which is perhaps the inherent difficulty in promoting a more substantive cooperation mechanism. Although ASEAN and the GCC had their first official contacts in 1990, the first ministerial meeting was not held until 2009. The ASEAN-GCC common vision on trade adopted at the meeting created much promise, but the results achieved have not been as expected," Dr. Narayanappa Janardhan noted.

Rewrite the rules of economic diplomacy.

Anwar Gargash, Director of Research and Analysis at the Diplomatic Academy, believes that the ASEAN-GCC Summit in Riyadh, Saudi Arabia, from October 18-20, was an opportunity to turn the tide.

Several GCC member states, particularly Saudi Arabia and the United Arab Emirates (UAE), have begun to diversify their partnerships. Both countries have been invited to or have participated in international forums, including the Group of Twenty (G20), the Shanghai Cooperation Organization (SCO), and the BRICS+ (Broad Group of Emerging Economies).

According to Dr. Narayanappa Janardhan, ASEAN-GCC cooperation is increasingly feasible as the two blocs have established a mechanism for regular foreign ministers' meetings and GCC members are growing in economic stature. This will facilitate the establishment of new cooperative relationships in diplomacy and security.

Dr. Narayanappa Janardhan believes that this ASEAN-GCC Summit provides a framework for both sides to continue connecting economic and diplomatic dynamics.

Currently, economic cooperation dynamics have been strongly boosted. At the bilateral level, Vietnam will be the next country after Indonesia and Cambodia to sign a CEPA with the UAE. Unlike free trade agreements, the CEPA includes services that promote economic diversification. One year after the UAE and India signed the CEPA in 2022, trade between the two countries increased by 6.9%.

According to Dr. Narayanappa Janardhan, agreements between countries could even pave the way for a broader free trade agreement between the GCC and ASEAN. In 2008, Singapore signed a free trade agreement with Qatar, which was eventually extended to the entire GCC.

However, Dr. Narayanappa Janardhan noted that there is no guarantee that everything will be easily realized. The GCC is not a homogeneous entity, and the interests of its members are diverse, making it difficult to reach consensus on economic issues. Previous attempts by the EU, the US, and India to sign a free trade agreement with the GCC have failed, while the China-GCC FTA remains stalled.

Nevertheless, Narayanappa Janardhan believes there is still reason to be optimistic about ASEAN-GCC cooperation. GCC countries prioritize partnerships that can contribute to achieving their strategic goals, particularly as the GCC seeks to reshape routes in global supply chains. ASEAN countries need to strive to create a favorable business environment to support that goal.

The GCC has pursued an Eastward-looking policy for decades, seeking to build long-term, diversified trade relationships to avoid economic dependence.

According to Dr. Narayanappa Janardhan, this process of “re-globalization” is accelerating, and along with it, the rules of economic diplomacy are being rewritten. This ASEAN-GCC summit in Saudi Arabia is an opportunity to ensure those rules benefit emerging economies in Asia and the Middle East.

Summit The recent ASEAN-GCC summit was particularly significant and achieved its set goals with many important results. Both sides affirmed their appreciation for each other's role and position, committed to strengthening and further deepening the relationship and cooperation on an equal and mutually beneficial basis; and planned to hold ASEAN-GCC summits every two years.

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