Plan to ease UAE-Saudi truck jams

Hundreds of UAE trucks laden with foodstuff and other goods are still jamming the border entry point inside Saudi Arabia because of lengthy customs procedures, even though seven years have passed since the two countries and four other Gulf Co-operation Council (GCC) nations signed a customs union agreement, according to UAE private sector officials.

The problem, which has persisted for several years, is inflicting heavy losses on UAE traders and businessmen as food items and other products are damaged because of the long delay, the Federation of UAE Chambers of Commerce and Industry said in a statement to Emirates Business.

The federation raised the issue at talks between private sector representatives from the GCC held in Doha on Thursday and proposed solutions to the problem, the statement said.

Long queues of loaded trucks are daily crowding the area between the UAE's Ghuweifat border point and Batehaa on the Saudi border, thus adversely affecting trade movement between the two GCC members.

"The federation raised this issue at the meeting of the Federation of the GCC Chambers of Commerce and Industry (FGCCI) in Doha. It highlighted its reasons and presented some proposals to tackle it," the statement quoted Saeed Khammas, Secretary General of the UAE Chambers, as saying.

Khammas said the proposals included "activating" an agreement to set up a joint committee to work on unifying customs procedures in the two countries, expediting measures at border points and designating special passageways for trucks that carry foodstuff and other sensitive products to avoid damage due to the long stay.

"Many truck owners have reported heavy losses because of the damage caused to their food products. The problem is also discouraging Saudi traders from importing food and other goods from the UAE because they fear the cargo could be damaged at the border point," Khammas said.

"This is negatively affecting trade between the UAE and Saudi Arabia at a time when the two countries are supposed to clear all customs obstacles. The problem is underscored by the fact that the UAE and Saudi Arabia are the largest trading partners within the GCC."

Official figures showed the UAE's imports from Saudi Arabia stood at an approximate Dh6.3 billion in 2009, accounting for 57 per cent of the country's total imports from the GCC.

Its exports to the kingdom in the first half of 2009 were valued at about Dh1.5bn while re-exports stood at Dh2.5bn, representing nearly 32 per cent and 30 per cent of the UAE's overall exports and re-exports to other GCC countries.

Businessmen from other GCC states have also complained about long delays at border customs points in the region despite the six-nation agreement.

In recent statements, FGCCI Secretary-General Abdul Rahim Naqi said he had received hundreds of letters from GCC businessmen and traders, complaining about their daily agony at inter-GCC border customs points. He said local traders were finding it difficult to export products to other GCC states, while some of them had to wait for long to complete routine checks.

As a result, many have suffered losses due to damage to their shipments while others preferred to pay high fees to avoid going through lengthy formalities to get customs exemptions, he said.

Listing a host of obstacles facing the region's traders and businessmen at border points, he said these "were only a very small fraction of bigger and more complicated difficulties facing GCC traders at borders".

"We have received many reports from the GCC private sector complaining that some states still demand certificates of origin from local exporters for their products while others ask for national quality certificates, which require payment of high fees, thus increasing the costs of those products," he said.

"Some states still impose additional fees on imported products, although these products are taxed only at the first entry point in line with the customs union agreement. In other cases, traders are subject to payment of fees or charges under different names while routine examination of products is taking a long time, damaging products and inflicting losses on traders. Many GCC products are subject to exaggerated checks."

Inter-GCC trade was estimated at $35bn in 2007, accounting for only 4.2 per cent of the group's total commercial exchange of nearly $824bn. In 2008, it is estimated to have grown to $38bn but was a fraction of the total trade of nearly $888bn.

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