The Institute of German Economics (IW) advises the European Union that it must enhance its trade relationship with the Gulf Cooperation Council states, even amid the ongoing conflicts in the Middle East. According to a study reported by “Der Spiegel”, countries such as Saudi Arabia and the United Arab Emirates are diversifying their trade partners, leaving the EU less central to their economic dealings.
The decline is notable: the EU’s share of all imports from these Gulf nations dropped significantly, falling from 26 percent in 2004 to only 18 percent in 2024.
Dr. Simon Gerards Iglesias, the study’s author, highlighted that the conflicts necessitate substantial, medium-term repairs to the energy infrastructure. He suggested that German manufacturers specializing in machinery and industrial plants could significantly benefit from this recovery effort.
To counteract the current trends, the IW recommends that the EU urgently finalize a comprehensive trade agreement with the Gulf states. Currently, Germany primarily exports automobiles, pharmaceuticals, and machinery to the region. In return, the EU could import climate-friendly steel or hydrogen at lower prices than would be possible through solely domestic production, according to Iglesias.
