The GCC and EU said they made progress in their efforts to co-ordinate trade and foreign policy at a ministerial meeting held in Riyadh on 8 May. The two sides are slowly moving towards a free trade agreement, although a final agreement remains distant.

Lack of a unified tariff structure in the GCC is holding back a breakthrough in the free trade agreement plan, EU officials said in Riyadh. They welcomed a decision by GCC finance ministers to draw up a tariff unification programme as an important step forward.

The two sides have also to reach consensus on EU plans for an energy/carbon tax. But, in a statement, the European Commission said the meeting 'produced the basis for a constructive dialogue in which previous GCC criticism was notably absent'.

The EU delegation was led by Greek Foreign Affairs Minister Karolos Papoulias and EC commissioner Manuel Marin. The GCC team was headed by Saudi Arabian Foreign Affairs Minister Prince Saud al-Faisal. The two sides discussed Yemen, Iran, Iraq, Middle East peace and other issues. The ministers urged Iran to respond to UAE's initiative to resolve the Tumb islands problem.