The free-trade agreement (FTA) negotiations between the Gulf Cooperation Council (GCC) and China are on fast track and expected to be completed before the end of 2006, the Times of Oman daily reported Saturday.

Abdul Malik Al Hinai, undersecretary for economic affairs at Oman's Ministry of National Economy, said a free trade agreement will be signed after the completion of talks.

GCC and China had signed a framework agreement on economic, trade, investment, and technological cooperation in July 2004 in Beijing.

Al Hinai said the two sides have made an excellent start, and the negotiations will first focus on goods and then on the services sector, investments and other areas.

The two parts are now discussing various methods and means for trade expansion and promotion of trade liberalization, said Al Hinai.

Liberalization in trade will be visible soon after the agreement comes into force. However, a complete GCC-China free-trade area will become a reality by the end of the tenth year of the agreement.

GCC-China FTA will considerably reduce tariffs, simplify the flow of goods and facilitate mutual investments.

It will also lay a solid foundation for bilateral cooperation. Technically, the agreement will give a big boost to mutual cooperation in the field of energy, said the daily, adding China is believed to be the third largest trading partner of the GCC, after the US and Japan.

The GCC has more than US$1.5 trillion overseas investments and has enormous demand for Chinese garments, fabrics, electronic and telecommunication products while the region's oil, natural gas, petrochemical and other chemical products will continue to attract Chinese markets.

China, which is the second largest oil-consuming country in the world, and the GCC, which possesses nearly 50 percent of world oil reserves and 20 percent of world oil production are targeting the size of their bilateral trade to reach US$100 billion by 2010.

The value of trade between China and the GCC soared 46 percent in 2004 to US$24 billion.

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