Finance ministers of Gulf Cooperation Council (GCC) states have confirmed they will launch their customs union on 1 January.

"All the hurdles have been overcome," Qatari Finance minister Yussef Hussein Kamal told reporters after the meeting ended.

The union between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates means a flat 5% tariff will be charged on goods and services across the trade block.

The GCC, which covers 31.1 million people with a GDP of $341bn, also considered ongoing plans to establish a common market by 2005 and a single currency by 2010.

Economic block

A proposal to create a central bank representing all the GCC will top the agenda of a meeting in Dubai on 12 January.

The GCC already allows its national banks to operate in any of the six Gulf states.

The Cooperation Council for the Arab States of the Gulf was created in 1981 to boost the economies of its six members over concerns that they were to vulnerabe due to their heavy dependence on oil wealth.

Leaders of the GCC will meet in Doha on 21 and 22 December to consider

The GCC has a combined oil output of about 13 million barrels per day and more than 50% of the world's proven crude reserves.