Nonetheless, current events indicate increasing cooperation among GCC countries on particular trade matters such as customs duties, quality standards, cross-member investment, and intellectual property right protection (USTR 179).
An agreement for free trade among the six member countries in 1983 was one of the early achievements of the Gulf Cooperation Council. All of the six member countries were signatories to the United Economic Agreement which provides duty free access to all products manufactured in GCC member countries with compliance to existent origin and ownership laws (Al-Muharrami et.al. 5).
With the aim of achieving goals for greater economic integration, member states agreed in 1999 to set external tariffs to a common range by 2005. In January 2003 the six GCC member states put up a Customs Union which in theory implies that member states are to adopt integrated customs laws and regulations, one point-of-entry, with open internal exchange of products and classification of products as national origin inside the GCC. Tariff application, income allocation and quality standards are some of the unresolved issues related to the bylaws of the Customs Union. The council was set to agree in 2005 on convergence criteria for adoption of a single currency in 2010 (USTR 179).
Bahrain is one of the most diverse and active financial centers in the Gulf. Much of the financial sector's growth can be credited to the oil boom of the 1970s and the replacement of Beirut as a major banking hub during the 1980s. The financial sector is presently the biggest contributor to GDP at 27.6 per cent. Around 370 offshore banks and representative branches are established in Bahrain (IMF Country Report).
. The Bahraini government is planning to draw more foreign banks to the area and is anticipating eliminating impending competition from Dubai and a return of Beirut. The government is assessing the structure that polices commercial banking sector of Bahrain in line with the above objectives. The government implemented new, fortified policies for the insurance sector in 2001 (USTR 33).
The Bahrain Stock Exchange (BSE) started operation in 1989 with two responsibilities: playing as a securities controller with management of the capital market and functioning as a securities exchange. Foreign businessmen will be permitted to own 100 percent of listed banks within three years. The BSE has also introduced several information facilities to disseminate real-time values for all listed in real time through satellite TV (IMF Country Report).
In July of 2000, the Ahli United Bank (AUB) was established by Bahrain's Al-Ahli Commercial Bank (ACB) and United Kingdom's United Bank of Kuwait (UBK) as an offshore banking unit. Trading began in August 2000 of shares of the AUB. The bank has a capital of $323.5 million which symbolizes an important development in the future of financial sectors in the region (USTR 33).
Finance and Banking in Kuwait
Kuwait has benefited from considerable budgetary surpluses starting from 1999. The budgetary surplus has risen to 40 per cent of GDP in 2005 and is projected to be in the rate of 43 per cent of GDP in 2006. This has been brought about by remarkably higher oil prices coupled with larger