Peter Mandelson, the European Trade Commissioner, said last night that the European Union (EU) was just two or three sticking points away from completing a trade deal with the Gulf.

Mr Mandelson told The Times that the two sides were discussing the final language and he was optimistic that the treaty could be signed by the end of the year.

His confidence followed meetings with his counterparts from the Gulf countries at the World Economic Forum gathering in the Middle East.

Free trade talks are taking place between the EU and the Gulf Co-operation Council, which comprises Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates and Saudi Arabia. An agreement is expected to remove tariffs and quotas on trade between the two sides and is a further sign of the Middle East’s growing economic strength.

Mr Mandelson declined to comment on which minister he had met. It is understood that a number of potential signatories of the agreement are reluctant to open their economies to EU members.

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