UK launches talks for free trade deal with GCC
UK Trade Secretary Anne-Marie Trevelyan visited Riyadh on 22 June to launch negotiations between the UK and the Gulf Cooperation Council (GCC) for a trade deal worth an estimated £1.6 billion per year. She met with the GCC Secretary General Dr Nayef Falah M. Al-Hajraf and her counterparts from all six GCC countries.
The GCC – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – is currently the UK’s seventh largest export market with total trade was worth £33.1 billion in 2021, of which £12.1 billion were services’ exports. UK government analysis predicts a free trade deal would increase this trade by at least 16%, adding at least £1.6 billion a year.
With almost £30 billion already invested in each other’s economies, this deal would also help unlock even more opportunities for investment between the UK and GCC countries. UK firms have at least £13.4 billion invested in GCC economies and GCC firms have £15.7 billion invested in the UK as of 2020.
The GCC bloc’s demand for international products and services is expected to grow 35% to £800 billion by 2035, opening huge new opportunities for UK businesses. A free trade deal would also open the door to increased investment from the Gulf, supporting and creating jobs across the UK. There were around 600 GCC-owned businesses in the UK in 2019, supporting over 25,000 jobs – a number that tripled over the previous decade.
More than 85% of total UK goods exporters to Qatar, Saudi Arabia and the UAE are SMEs according to official UK data. In 2020, around 10,700 UK SMEs exported goods to the UAE, 5,500 exported to Saudi Arabia and 4,100 exported to Qatar.
Tariffs outlined on foods are mostly 5% across the GCC, where in some cases individual countries charge higher tariffs on specific products. British food and drink exports to GCC countries were worth £625 million last year, and a deal that significantly reduces or removes tariffs would mean significant benefits for British farmers and producers.
“From our fantastic British food and drink to our outstanding financial services,” said Trevelyan, “I’m excited to open up new markets for UK businesses large and small, and supporting the more than ten thousand SMEs already exporting to the region. This trade deal has the potential to support jobs from Dover to Doha, growing our economy at home, building vital green industries and supplying innovative services to the Gulf.”
The UK is a world leader in technology, cyber, life sciences, creative industries, education, AI, financial services, and renewable energy. It is anticipated that UK businesses in these industries will play a role in supporting GCC countries as they diversify their economies to move away from a reliance on oil and towards other sectors.
The UAE, for example, has set a target of generating 50% of its electricity from renewable sources by 2050. Exports of UK wind turbine parts currently face tariffs of up to 15%.
“The global transition to clean energy includes countries throughout the Middle East which are seeking to make the most of their excellent renewable resources such as solar and wind,” said RenewableUK CEO Dan McGrail. “As a global leader in wind, marine energy and green hydrogen, we’re perfectly placed to help other countries to accelerate their efforts to decarbonise their energy systems.”