The move by the new British government to reboot negotiations with the GCC countries to secure a free trade agreement (FTA) is expected to give a critical fillip to the two-way investment and trade flows.
The UK government claimed that the long-awaited trade agreement with the GCC would provide a substantial economic opportunity, as some £19 billion in total had already been invested in each other’s economies by 2021. Talks on an FTA with the six GCC states — the UAE, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia — started under the Tory government in 2022 and the sixth round was held in Frebruary this year.
Economists believe an FTA agreement with the GCC could potentially boost the thriving economic ties further, ensuring companies from both saide to make the most of the new opportunities.
The UK’s Business and Trade Secretary Jonathan Reynolds, outlining the recently elected Labour government’s priorities for new trade deals, announced the new government’s intention to deliver trade talks, starting with the GCC, India, Israel, South Korea, Switzerland and Turkey.
The sixth round of free trade talks between the UK and the GCC ended in February this year. The Labour government expects the next round to take place before the end of the year. A government statement after the February talks said that the discussions centered around 21 policy areas over 30 sessions, with “good progress” being made on both sides.
Total trade between the GCC and the UK is worth around 59 billion pounds ($76 billion), according to the latest estimates.
The UK’s trade and investment relationship with the UAE is now worth more than £25 billion and the Emirates is Britain’s 19th biggest trading partner. The UAE investment into the UK has risen to more than £10 billion over the past three years.
Over 13,500 UK companies are exporting their products to the UAE, and this will certainly increase once the UK-GCC Free Trade Agreement comes into force, according to the UAE-UK Business Council.
“Boosting trade abroad is essential to deliver a strong economy at home,” Reynolds has said in a statement from the UK Department for Business and Trade. “I’ve wasted no time taking stock of progress and getting ready to press on with trade talks with our international partners.
Restarting talks is the first step towards agreeing the high-quality trade deals the UK needs to give businesses access to international markets, boost jobs and deliver that growth.
With exports totalling £855 billion, the UK was the world’s 4th largest exporter in 2022. High-quality British goods and services are admired globally and the government is committed to using every lever available to help British businesses sell around the world, said the statement.
FTAs are not the only tool to drive economic growth through trade. The government also plans to publish a trade strategy which aligns with our industrial strategy, enhances our economic security and supports our net zero ambitions.
“From the Gulf to India, our trade program is ambitious and plays to the UK’s strengths to give British businesses access to some of the most exciting economies in the world,” he added. “Our teams will be entering negotiating rooms as soon as possible, laser-focused on creating new opportunities for UK firms so they can support jobs across the country and deliver the growth we desperately need,” said Reynolds.
India, with which the UK is negotiating a Free Trade Agreement and Bilateral Investment Treaty, is projected to be the world’s third largest economy by 2027. A trade deal would give UK businesses better access to its burgeoning market of middle-class consumers, projected to grow to over a quarter of a billion consumers by 2050.