RIYADH: Gulf Cooperation Council nations should adopt trade policies aligned with their industrial development goals to reduce external vulnerabilities and strengthen their influence in global commerce, according to a new analysis.
In its latest report, professional services firm KPMG said identifying supply chain risks, diversifying sources of critical inputs, and supporting outbound investment in upstream production are essential for regional economies to navigate an increasingly complex and fragmented global landscape.
The report noted that GCC member states need to act with unity, integration, and ambition over the next few years by implementing coordinated trade and industrial strategies to ensure greater economic stability and a stronger voice in global markets.
In June, the World Bank underlined the region’s bright economic prospects, projecting GCC growth of 3.2 percent in 2025, accelerating to 4.5 percent in 2026.
Commenting on his firm’s report, Omar Alhalabi, partner and head of economics and public policy advisory at KPMG Middle East, said: “At the regional level, GCC countries should use the Customs Union as a platform to align trade and industrial policy, coordinate negotiations in priority sectors, harmonize incentive frameworks, and co-finance joint industrial projects.”
He added: “Together, these measures would strengthen supply chain resilience, reduce external dependencies, and allow the region to engage globally from a position of strategic strength.”
Since its founding in 1981, the GCC has evolved into a mature and successful trade and economic bloc, making key strides toward integration. Its customs union agreement eliminated intra-GCC tariffs, unified external tariffs, and eased trade restrictions.
KPMG noted that trade policies will have tangible effects on both businesses and citizens.
Stronger supply chain resilience can help curb price volatility and guard against shortages, while industrial localization has the potential to create high-skilled employment opportunities.
Saudi Arabia, under its Vision 2030 agenda, is diversifying revenue sources and creating added value across sectors, with the industrial sector leading the transformation.
Initiatives such as “Made in Saudi” aim to boost local content in both oil and non-oil sectors, which the Kingdom sees as central to its Fourth Industrial Revolution drive.
The report highlighted that the GCC’s historically open trade model, with average tariffs of around 5 percent, has supported integration into global markets and secured broad access to international inputs.
This approach has helped Saudi Arabia source raw materials and machinery vital to its industries, while positioning the UAE as a leading global logistics hub.
KPMG cautioned that diverging and fragmented trade and industrial strategies across the region, coupled with a lack of coordination, risk weakening collective leverage in global negotiations.
“Saudi Arabia, under Vision 2030, is prioritising industrial localization and building domestic supply chains across chemicals, metals, pharmaceuticals, and renewable energy components in Riyadh. The UAE, in contrast, is deepening its role as a re-export hub by streamlining customs, negotiating bilateral trade agreements, and leveraging its free zones to attract global investment,” said KPMG.
It added: “Both strategies carry significant merit, but the lack of coordination risks diluting the region’s collective leverage in global negotiations.”
