European Union and Gulf Arab countries aim to resume free trade talks in May, officials said, ending months of stalemate which Arab states blamed on a growing list of EU political and economic demands.
Gulf Cooperation Council Secretary-General Abdul Rahman al-Attiya, speaking after meeting finance ministers of the six GCC countries on Sunday night, said negotiating teams will meet late next month and to try to seal a deal "as soon as possible".
His comments were echoed by EU Trade Commissioner Peter Mandelson. "I want to see them resume in the middle of May. I want them to be intensive, hardworking," he told reporters after talks with businessmen in the Saudi capital on Monday.
Mr Mandelson was speaking on the eve of a gathering of EU and GCC foreign ministers in Bahrain, where the two sides were to discuss how to advance the free trade talks, as well as EU nuclear negotiations with Iran and developments in Iraq.
The GCC, a customs union and political alliance which groups Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Oman and Qatar, has been negotiating a free trade agreement with the European Union for more than 15 years.
Last year Mr Attiya criticised European requests for clauses in the proposed deal covering issues such as weapons of mass destruction, illegal immigration and human rights, saying the demands amounted to delaying tactics.
A Gulf source said the two sides later agreed informally to handle political matters separately.
But disagreement remained over access for Gulf exports to EU markets, the source said. After agreeing to reduce tariffs on aluminium and fish - though not enough to satisfy the Gulf states - the EU was still reluctant to open up for petrochemical imports from the oil-rich Gulf states, in particular Saudi Arabia.
European Union officials argue that the mainly state-owned Saudi Basic Industries Corp. (Sabic) gets gas feedstock at concessionary prices, a charge denied by Saudi Arabia.
"I see no fundamental obstacles to overcome," Mr Mandelson said. "There are no issues that we cannot resolve to make this deal between us, but we need commitment and good faith."
The European Union is also seeking greater service industry access in the Gulf states.
"The next round of negotiations will focus on that," the Gulf source said, adding that the GCC finance ministers agreed to prepare a common list of services they were ready to liberalise, and a timetable for opening up.
GCC countries set up a customs union in 2003. They plan a common market by 2007 and a single currency by 2010.
But Saudi Arabia has warned it may have to reintroduce tariffs on goods from Bahrain after its tiny neighbour agreed a bilateral free trade agreement with the United States - a deal which Mr Riyadh says violates the GCC's economic pact.
Oman and the United Arab Emirates are also discussing possible bilateral deals with the United States.
"Contemplating bilateral deals would undermine the customs union of the GCC," Mr Mandelson said. "It would weaken economic integration in the region. It would be a spoiler for the economic opportunities that we want to create."
"We should not go down that bilateral road."