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Thu 4 Jan 2007 02:25 PM

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Could Merkel's GCC visit spell FTA?

German Chancellor's visit to the Gulf comes amid speculation that a GCC-EU free trade agreement is imminent.

Angela Merkel will visit the UAE, Saudi Arabia, Kuwait and Egypt next month to promote trade ties and discuss political instability in the Middle East.

News of the visit follows reports that a free trade agreement between the GCC countries and Europe is "95% agreed upon".

According to press agencies quoting Merkel's spokesman Ulrich Wilhelm, the German Chancellor's four-day tour - which begins on February 3rd - will have a "strong emphasis on economic links."

"This is a very important economic zone for us and, alongside the stabilization of the political situation, it will be about expanding trade links to our mutual benefit," Wilhelm told reporters.

Merkel has vowed to reactivate the peace process in the Middle East when Germany holds the rotating presidency of the European Union in the first half of 2007.  The country will also lead the G8 this year.

GCC-German trade relations are strong and the prospect of a long-awaited free trade agreement with the EU was given a boost last month. 

In what was described as 'exploring new avenues of cooperation' between the two countries, Dr. Bernd Faulenbach, German State Minister for economic affairs and technology, met with Sheikh Hamed bin Zayed Al Nahyan, Chairman of the Abu Dhabi planning and economy department.

The meeting came just days after the German ambassador to Saudi Arabia, Juergen Krieghoff, claimed that negotiations over a free trade agreement between the GCC and Europe are 95% agreed upon.

Earlier last year it was reported that such an agreement would be signed in the first quarter of 2007, with Bahrain's deputy finance minister claiming that a move was 'imminent'.

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