The UAE’s main economic partner- European Union, has imposed new duties on plastics from the UAE, Iran and Pakistan, saying the three were illegally subsidizing exports to Europe. The decision means Polyethylene Terephthalate from the UAE, Iran and Pakistan will face EU import duties of €44.02, €139.70 and €42.34 per ton until 2015. The UAE has decided to fight back against the EU decision to impose new customs duties on the country's plastics exports on the grounds the move has no justification. The Ministry of Economy rebuffed EU claims that it is subsidising its plastics production and threatened to take the issue to the World Trade Organisation (WTO). In another statement, the six-nation Gulf Cooperation Council (GCC) said the country has the right to defend itself against that decision since there was no reason for a new tariff by the EU. The Ministry will ask the EU Commission, in accordance with WTO agreements, to open an interim review to ascertain the absence of any subsidy on its plastics production, which removes a main element for the continuation of such duties.
The EU is the GCC's top economic partner, with their two way trade rising to nearly US$132.5 billion in 2007 from US$110 billion in 2006 and US$107 billion in 2005. But the surplus has remained largely in favour of the EU due to a sharp growth in its exports to the Gulf region and the fact that the GCC's exports to the European markets are confined to oil, gas, petrochemicals and aluminium. Official GCC figures showed the trade surplus for the EU hit an all time high of around US$54.9 billion in 2007 compared with only about US$17 billion in 2006. No data for the following two years is available but trade is expected to have surged in 2008 because of high oil prices before slipping in 2009.