Premised on the promotion of free trade and rules-based relations, the international economic order of the past 50 years has been a boon for Germany, Saudi Arabia, and other European Union (EU) and Gulf Cooperation Council (GCC) member-states. It has also been key to economic growth the world over: Since 1976, global GDP has increased 17-fold. The previous such increase took over 100 years to achieve.
Economic growth today constitutes a deeply interdependent phenomenon, and thrives on positive-sum, mutually beneficial trading relations between nations. Nevertheless, threats to this prosperous status quo abound, from trade barriers portended and put in place by the Trump Administration in the United States to stalled multilateral progress toward global trade liberalisation at the World Trade Organisation (WTO).
To address and arrest this damaging momentum, the Konrad-Adenauer-Stiftung (KAS) and the Prince Saud Al Faisal Institute for Diplomatic Studies (IDS) organised a two-day workshop to discuss the potential for Saudi-German and GCC-EU leadership to strengthen the multilateral system of rules-based trade and deepen economic relations between the two blocs. Thirty officials and experts from Germany, Saudi Arabia, and other European and GCC countries attended the workshop, which was held from 26-27 January 2026 in Riyadh, Saudi Arabia.
The workshop’s first day facilitated an exchange of perspectives related to important contemporary debates on globalisation and protectionism, the multilateral trade system, and EU-GCC economic relations. These discussions served to identify areas of common understanding and points of disagreement between the participants, starting with global developments and ending with EU-GCC ties. Building on the discussions from Day 1, the workshop’s second day featured two brainstorming discussions designed to elicit exchanges and ideas for leveraging Saudi-German leadership to strengthen the multilateral economic order and capitalise on the potential transformative impacts – beyond simple tariff reduction – associated with deepened EU-GCC economic relations.
The workshop highlighted a strong case for a comprehensive EU‑GCC Free Trade Agreement (FTA) that goes beyond simple tariff reduction, thus responding to the current geo-economic climate with a strong message in support of liberalised trade, rules-based relations, and international economic integration. On the way to a future FTA, moreover, applying the ‘integration at different speeds’ logic frequently discussed in the EU context can deepen bilateral or minilateral cooperation on regulatory alignment, investment facilities, sectoral partnerships, support for small- and medium-sized enterprises (SMEs), and other areas that could one day become part of a comprehensive deal. Finally, the discussions underscored the value of institutionalised Track‑1.5 EU‑GCC exchanges like the KAS-IDS workshop to generate forward‑looking, out-of-the-box ideas to re‑energise long‑stalled trade negotiations and re-vitalise multilateral, government-to-government formats.
KAS derived four policy recommendations from these takeaways and insights:
- Rebuild public and political support for free trade in Europe. Given the susceptibility of global economic integration and trade liberalisation to the protectionist narratives championed by populists across the continent, proponents of globalisation must make their case directly to the European people. This task falls first and foremost on national-level politicians and Members of the European Parliament. In the case of EU-GCC FTA negotiations, GCC negotiators can assist in these efforts by expanding their outreach beyond the European Commission and into the ranks of the parliament.
- Use WTO plurilateral mechanisms to form EU‑GCC ‘coalitions of compliance.’ In the absence of a FTA, greater EU-GCC involvement and/or leadership in the Investment Facilitation for Development initiative, the Multi-Party Interim Appeal Arbitration Arrangement, and other plurilateral WTO mechanisms can advance efforts to harmonise rules and mechanisms of dispute resolution.
- Prioritise integrating SMEs into deepening EU-GCC economic ties. Strengthening SME involvement can occur through establishing a dedicated EU-GCC dialogue in this regard, inviting SME representatives to future KAS-IDS dialogues, creating bilateral investment‑promotion tools, and/or enabling trilateral cooperation combining German SME expertise with Gulf capital and political influence for regional projects.
- Advance sectoral partnerships at the bilateral, minilateral, and multilateral level, even in the absence of an EU-GCC FTA. Promising industries include green hydrogen, green steel, and green cement, and potential instruments of partnership comprise long-term offtake agreements, targeted supply- and demand-side subsidies, and reducing the red tape associated with importing these goods under the newly implemented EU Carbon Border Adjustment Mechanism (CBAM).
