Gulf states to consider free trade area with Iran

DUBAI, Sep 1 (Reuters) The Gulf Cooperation Council is considering negotiations with Iran to create a free trade area between its six Gulf Arab members and the nearby Islamic Republic, the group's secretary-general said today.

GCC Secretary-General Abdul-Rahman al-Attiya said the body had received a letter from Iranian Foreign Minister Manouchehr Mottaki saying Iran was interested in trade talks.

''(The letter) was linked to Iran's desire to enter into negotiations to create a free trade zone with all the Arab countries,'' Attiya told a news conference after a GCC meeting.

''As long as there is a desire from the Iranian side then the GCC cannot but be positive in relation to such an issue,'' he said, adding the GCC wants good ties with its neighbours.

Attiya said Iran had raised the possibility of a free trade area before but the latest enquiry had come in an official letter and GCC countries were interested in steps that would strengthen ties with neighbouring countries.

Attiya said a committee was looking into the details.

The GCC is a loose political and economic alliance comprising the Gulf Arab countries of Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman.

It does not include Iran, a Shi'ite Muslim power stuck in a standoff with the West over its nuclear programme.

Close allies of the United States, Gulf Arab countries share its suspicions that the nuclear programme Iran says is intended to generate electricity, is aimed at making an atomic bomb.

They have also expressed unease about what they see as the spread of Iranian influence among Shi'ites in Iraq and Lebanon.

The GCC is considering a peaceful atomic programme of its own in partnership with the United Nations nuclear watchdog and Attiya said progress on those plans would be discussed in further detail at a conference in Qatar in November.

Saudi Arabia, the UAE and other Gulf Arab countries have said they would not allow their territories to be used as a launch pad for any military attack on Iran.

Reuters PY GC2358