"Negotiations currently taking place in Brussels between GCC states and the EU to establish a free-trade zone are advancing," said the head of the GCC, Abd al-Rahman al-Attiyah in an interview with Abu Dhabi TV.

"The two parties are accelerating their efforts to conclude negotiations as soon as possible ... If things go as planned [talks] are expected to be concluded within a few months," the GCC secretary-general added.

EU Trade Commissioner Pascal Lamy said last month he hoped the EU and the GCC would forge the deal by the end of the year.

"There are no obstacles hampering the negotiations ... But there are certain technical matters that need to be discussed further"

Abd al-Rahman al-Attiyah,
GCC secretary-general

The two blocs signed a framework economic cooperation agreement in 1998 but have failed to strike a free-trade pact.

The GCC states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) met one of the EU requirements when they launched a customs union in January 2003.

Monetary union

They plan to establish a monetary union next year, a common market in 2007 and a single currency by the start of 2010.

Differences also exist between the two blocs over political issues such as human rights and weapons of mass destruction.

"There are no obstacles hampering the negotiations ... But there are certain technical matters that need to be discussed further," Attiyah said.

The European Union is the GCC's principal market and its second largest supplier after Japan.

EU exports to the oil-rich Gulf monarchies were worth around $25bn in 2001, with imports amounting to $22bn, according to EU data.