The GCC customs union will generate growth in the regional technology markets and encourage foreign direct investment (FDI), a senior IT executive has said.

'As a single customs union market, the GCC consolidates six former country markets into a trading block that has real economic muscle,' said Tech Data managing director Steve Lockie.

'For us in the technology industry, that means a clearer and more compelling regional opportunity and therefore increases the potential for investment in the region,' said Lockie.

Tech Data, which represents over 20 leading IT multinationals active in the Middle East, says it has already launched initiatives in support of computer product resellers in the region as they manage the transition to the new customs union.

'The company has now also confirmed that it is prepared to expose its records and databases to allow the GCC authorities to have access to full lists of computer and technology products as well as their 'official' list prices,' Tech Data said, adding it had the capability to allow customs officials to access price lists directly, supporting efficient revenue collection in the new union.

'The customs union move means we can foresee an end to many aspects of the 'grey market' that has done so much to impede the development of our local market. With a little work and cooperation, we can now bring an end to practices such as under-invoicing that are draining the industry and governments alike of their rightful revenues,' said Lockie. 'In the case of the industry, those revenues have the potential to be used to build services and added value for consumers.'

Resulting in a more competitive market and with economies of scale being passed on to consumers in the GCC, the customs union also calls for a transition period of three years being built into the pan-regional agreement in order that teething problems can be sorted out.

With customers across the region served from Tech Data's hubs in Jebel Ali and Bahrain, the company reports that it has encountered few hurdles in the move to the new union. 'There have been problems, of course, but they have been minimal,' says Lockie.

'One of the reasons we have worked to reduce shipping costs for our customers in the region was to see them through an anticipated difficult early phase, but we have been surprised at how smooth the transition has been so far.'