The Gulf Cooperation Council (GCC) is experiencing significant shifts in its trade patterns, driven by various factors including improved regional integration, new trade corridors, technological advancement, and changing global economic dynamics. These transformations are reshaping how the GCC conducts trade both internally and with the rest of the world, positioning the region as a crucial hub in global commerce.
What’s particularly striking is the speed and scope of these changes. In an era marked by supply chain disruption, geopolitical recalibration, and the race toward digital economies, the GCC’s agility in redefining its trade strategies stands out. From logistics infrastructure upgrades to digital customs and emerging trade alliances, the region is embracing a multifaceted approach to remain relevant and resilient on the global stage.
Increased intra-GCC trade with improved customs harmonization
The GCC has made substantial progress in streamlining trade processes through customs harmonization initiatives. A significant development has been the introduction of a 12-digit Harmonized System (HS) Code, replacing the previous 8- or 10-digit systems used across different GCC nations.
This standardization has been crucial in eliminating discrepancies in goods classification and enhancing trade efficiency across the region. The harmonization efforts extend beyond mere classification systems. The GCC's focus on standardizing trade processes has led to more efficient cross-border trade operations, reducing delays and costs associated with customs clearance. These improvements have been particularly beneficial for businesses operating across multiple GCC countries, facilitating smoother movement of goods within the region.
New trade corridors developing between GCC and East Africa
The GCC countries have been actively developing trade corridors with East Africa, marking a strategic pivot in regional trade relations. This development is characterized by significant investments in port infrastructure and trade routes. The United Arab Emirates, through DP World, has taken a leading role by managing key ports including Berbera in Somaliland, Bosaso in Puntland, and the Doraleh container terminal in Djibouti.
Saudi Arabia has also made substantial investments, committing $100 million to enhance Port Sudan's infrastructure and operational efficiency. Meanwhile, Qatar is exploring investments in Somalia's port of Hobyo, which will strengthen trade links between Somalia and the Gulf. These investments are complemented by the development of crucial trade corridors such as the Northern Corridor connecting to Kenya, the Central Corridor linked to Tanzania, and the Djibouti-Ethiopia Corridor, which handles about 95% of Ethiopia's trade.
Rising e-commerce volumes driving warehouse demand and last-mile innovations
The GCC's e-commerce sector is experiencing remarkable growth, with market value expected to surge from USD 8 billion in 2022 to over USD 23 billion by 2028, growing at a CAGR of above 19%. This growth is driving significant changes in warehousing and logistics infrastructure. Consumer behavior statistics show that 91% of Saudi consumers engage in online shopping, with 14% making daily online purchases.
The expansion of e-commerce has led to increased demand for warehousing space, with the GCC warehousing and distribution logistics market projected to grow from USD 14.69 billion in 2023 to USD 21.13 billion by 2028.
Companies are increasingly adopting automated warehousing systems and integrating advanced warehouse management systems with automation technologies to optimize operational efficiency.
Strategic pivot towards Asian markets
The GCC is experiencing a significant reorientation of its trade patterns towards Asia, particularly China and India. Asia now absorbs over 70% of total GCC oil and gas exports, with China accounting for 20% and India for 15%. This shift extends beyond energy trade, with China becoming the GCC's top import partner. For instance, non-oil trade between the UAE and China reached US$58 billion in 2021, marking a 27% growth from 2020.
Adapting to Global Economic Risks and Diversification Strategies
Amid shifts in global energy demand, GCC nations are proactively repositioning their economies beyond hydrocarbons. According to the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf (GCC‑Stat), the region still ranks sixth in global goods‑trade volume—accounting for 3.4% of world trade—with total trade exceeding USD 1.5 trillion in 2023. This resilience underscores the Gulf’s determination to diversify through sectors such as manufacturing, technology, and services—reinforced by new Free Trade Agreements with Singapore, Korea, and the UK .
At the same time, the GCC’s economic ties with Asia are deepening. China alone accounted for approximately 19.2% of GCC exports—roughly USD 158 billion in 2023—while supporting 21.2% of the region’s merchandise imports . India, too, has emerged as a critical partner: GCC contributed close to 35% of India’s oil imports and 70% of its gas imports in 2021‑22, totaling nearly USD 154 billion in bilateral trade. This dynamic highlights a two‑pronged strategy—geographic diversification and deeper bilateral integration with both developed and emerging markets.
Strengthening Trade Data & Intelligence
The adoption of 12-digit HS codes across all GCC countries in early 2025 marks a transformative leap in trade data precision and analytics capabilities. Previously, discrepancies between 8‑ and 10‑digit systems caused friction; now, a standardized 12-digit Harmonized System expands tariff line granularity from approximately 7,800 to over 13,400 classifications. This uniform coding not only harmonizes customs clearance but also enables more insightful economic monitoring—helping policymakers and businesses make smarter decisions based on fine-grained trade flows.
Moving forward, this foundation supports more dynamic trade mechanisms. Accurate HS codes feed directly into ERP and e‑invoicing systems, reducing manual errors and compliance risk. Clinching this harmonization means smoother customs, enhanced data for Free Trade Agreement negotiations, and stronger integration as a unified economic bloc. It's a pivotal step in turning regional trade ambition into actionable intelligence.
The changing trade patterns in the GCC reflect a region in transformation, adapting to new global economic realities while strengthening its position as a vital trade hub. The combination of improved customs harmonization, new trade corridors with East Africa, booming e-commerce, and strategic pivot towards Asian markets demonstrates the GCC's commitment to diversifying its trade relationships and modernizing its trade infrastructure. These developments are positioning the GCC as a more integrated and efficient trading bloc, capable of meeting the challenges and opportunities of 21st-century global commerce.
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