The Qatari daily The Gulf Times on Sunday published an article indicating the two countries have held initial talks on the free trade pact, which could be signed this year.


Qatar's Minister of Economy and Commerce Shaikh Muhammad bin Ahmad bin Jassim Al Thani was quoted at a recent conference as saying the government considered a free trade agreement with the US vital.


"Yes, we are definitely considering a free trade agreement," he said at the Project Opportunities in Qatar conference.

The deal would also assist Qatar's economic integration into global markets, according to government sources.

"Both sides will benefit from the agreement and they will be long-term. On our side our exports will get tax relief and protection on the strength of a Free Trade Agreement (FTA) with the US," the sources said.

Saudi concerns

Qatar's neighbour Bahrain has also recently agreed on an FTA with the US, raising concerns among other Gulf Cooperation Council (GCC) members, especially Saudi Arabia.

Saudi Arabia has threatened to
slap duties on Bahraini goods

The move sparked a threat by Riyadh to slap customs duties on goods from Bahrain.

Saudi Arabia's Crown Prince Abd Allah bin Abd al-Aziz had also boycotted the recent GCC summit in Bahrain apparently in protest against the trade deals with the US.

The kingdom, a regional heavyweight, had accused its smaller Gulf neighbours of weakening GCC solidarity by forging separate economic and security agreements with foreign powers.

Other GCC members such as Kuwait, Oman and the United Arab Emirates plan to sign similar deals, which could further alienate Riyadh.