Latest news with #UK-GCC
Business Times
3 days ago
- Business
- Business Times
UK economic team looks beyond Europe
THIS week marks the 50th anniversary of the United Kingdom's June 1975 referendum of its membership of the European Common Market, the precursor of the European Union (EU). Yet, some five decades later, the trade policy of the UK is increasingly looking beyond Europe, post-Brexit. In the last few weeks alone, the UK government has agreed a new trade deal with India, plus also a tariff agreement with the United States. UK ministers, including Chancellor Rachel Reeves, have said that this further deal could be finalised swiftly in the form of a new trade agreement with the Gulf Cooperation Council (GCC) comprising Saudi Arabia, United Arab Emirates (UAE), Bahrain, Oman, Qatar and Kuwait. While the GCC economy is, collectively, not nearly as large as that of the United States or even India, the deal would be a significant prize with the Middle Eastern bloc's total GDP of around US$2 trillion in 2022. According to the World Bank, if the GCC continues to grow at a business-as-usual rate, combined GDP would grow to about US$6 trillion by 2050. A second reason why the UK government would celebrate a deal is that the GCC has signed relatively few such agreements to date, including a pact with South Korea. A further big prize for London of a GCC deal could be further, open access to investment from Gulf sovereign wealth funds which tend to be cross-sector investors who often take a long-term multi-decade economic perspective. Total UK-GCC bilateral trade is currently worth around £60 billion (S$104.5 billion). This makes the GCC bloc as a whole equivalent to the UK's fourth largest non-EU export market behind the US, China and Switzerland. A UK deal with the GCC is forecast to add as much as £1.6 billion to this existing bilateral trade in the short term. The UK government hopes that the value will rise by an additional £8.6 billion a year by 2035. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Wider developments It is possible that wider developments could reinforce this dynamic of closer UK-GCC economic cooperation. This includes potential steps toward implementation of a proposed India-Middle East-Europe Corridor to foster connectivity and integration with Asia via a proposed route from India and into Europe. The corridor – which would comprise vast road, railroad and shipping networks – was given new impetus in September 2023 at the G20 summit in New Delhi. A memorandum of understanding was signed to try to develop the project by the governments of India, United States, UAE, Saudi Arabia, and several key European nations. The potentially imminent new UK-GCC deal underlines, yet again, the emphasis London is putting on consolidating ties with key non-European Union nations, post-Brexit. One of the key ideas of some leavers in the 2016 EU referendum was rediscovering the UK's heritage as a formerly strongly-focused global trading nation. This includes former parts of the British Empire and now-Commonwealth, such as India and Singapore; plus other key emerging markets like the GCC states; and key industrialised countries such as Australia, Canada and the US. However, ambitious as much of this agenda is, some of it is a long way from being fully realised. Perhaps the best example is the apparently remote possibility of any UK trade deal with either of the two world's biggest economies: China and the US. For instance, while there has been much fanfare over a potential new UK-US trade deal, any such agreement looks unlikely. This even under the pro-Brexit Trump administration in the period to early-2029. Multiple challenges Equally, while London and Beijing have both been impacted by the disruptive diplomacy of the Trump administration, there are multiple political and economic challenges that appear likely to prevent any deal in the short to medium term. Certainly, a UK-China accord is not one of the deals closest to the finish line compared to potential others like South Korea, Switzerland, Canada, and Mexico, a number of which may potentially be concluded during the current UK parliament ending probably in 2028 or 2029. There are also human rights concerns about some of the agreements, including the GCC and India ones. The UK Trade Union Council has recently slammed such economic agreements with 'countries that abuse human rights and workers' rights, and violate international law'. It also welcomes the recent UK's decision to suspend trade talks with Israel because of the accelerated military offensive in Gaza and the country's decision to limit the amount of aid allowed into the Palestinian territory. A wider critique of the UK's post-Brexit trade deal strategy came last month in a report from the Tony Blair Institute for Global Change. It argues that the UK government's hyper focus on traditional broad-based trade agreements is misaligned with the country's service-based economy. The think tank, which is chaired by former UK prime minister Blair, asserts that time-consuming, goods-focused trade agreements offer diminishing returns on investment and are poorly matched to the UK's core strengths in services and digital trade. So, rather than doubling down on such slow-moving, broad trade pacts, it advocates instead a movement towards more targeted services-orientated, market access deals that can be negotiated faster and deliver bigger economic impact. The Blair Institute report highlights that, between 2020 and 2024, London inked only three new trade agreements, which are expected to boost exports by a comparatively small £9.5 billion in the long run. In contrast, over the same period, successive UK administrations resolved some 640 market access barriers, whose strategic bilateral market gains increasingly have the potential to deliver higher value, faster. One example cited as good practice is the UK's digital economic agreement with Singapore. This was negotiated relatively quickly in 2022, and leverages UK strengths as a tech and services leader. With the GCC agreement almost finalised, the Blair Institute recommendations are unlikely to significantly influence the end game of that negotiation. However, there could be scope for bringing the insights into wider negotiations with countries including South Korea, Switzerland, South Korea, Canada, and Mexico. This may require the UK Department for Business and Trade to reallocate resources and focus efforts on areas with the greatest potential return with a clearer strategic framework for driving new deals. Taken overall, Brexit is therefore offering new opportunities for the UK to reinvent its world role, especially in the context of trade relations. However, despite the flurry of recent deals, it will probably not be clear for some time exactly how successful this ambitious agenda proves to be, not least given the services orientation of the UK economy. The writer is an associate at LSE IDEAS at the London School of Economics
Zawya
29-04-2025
- Business
- Zawya
UK-GCC FTA ‘in last mile'; to be signed by year-end: Qatar's envoy to Britain
Qatar - Sheikh Abdulla bin Mohammed al-Thani, Qatar's ambassador to the UK and his counterpart Neerav Patel address a function to mark the launch of 'The Economic Contribution of Qatari Investments in the UK'. The UK-GCC (Gulf Co-operation Council) free trade agreement (FTA) is on its last mile and expected to be signed by the end of this year, according to Sheikh Abdulla bin Mohammed al-Thani, Qatar's ambassador to the UK. "It (the UK-GCC FTA) is in the last mile and by the end of this year we should see the light in the tunnel," Sheikh Abdulla said at a function where a report 'The Economic Contribution of Qatari Investments in the UK', prepared by the Centre for Business and Economic Research (CEBR), was launched. The Gulf countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - which have embarked on reforms to diversify their economies away from hydrocarbons, view that benefits would be plentiful and that the US' tariff policies have now given a renewed thrust for the UK to reach a FTA with the GCC. Highlighting that the GCC are open trading nations, British ambassador to Qatar Neerav Patel said: "I think now or never would be an important moment for us to show the signal that we are ready to deepen that trading partnership to our mutual benefit." Finding that it (FTA) is one of those areas that sometimes don't get the headlines or the public attention; he said but there's a lot of work going on behind the scenes to try and make that a success. The UK believes a GCC FTA would increase bilateral trade by 16% and could add an extra £8.6bn a year to the existing £57.4bn worth of annual trade between the two sides. In reply to written question in the UK parliament, Douglas Alexander, Minister of State for Trade Policy and Economic Security had in December last year said talks throughout the autumn have continued to be constructive, with good momentum from the GCC, which has enabled further treaty text to be agreed. The focus from both sides is on achieving a modern and commercially meaningful agreement. A mutually beneficial FTA between the UK and the GCC will deliver economic growth, higher wages and new investment, he said, adding the negotiation is progressing at pace and good progress is being made in services, investment and digital; goods; and other areas such as sustainable trade, including environment and labour. "Central to growing our economy and ensuring working people in every community feel the benefits of that growth, is an expansion of FTAs with strategic partners," according to him. The UK's recently appointed Economic Secretary to the Treasury, Emma Reynolds, had described a FTA with the GCC as 'in development'. The GCC secretary-general Jasem Mohamed AlBudaiwi had last year highlighted a strong interest from the new British government (under Keir Starmer) and a genuine desire to wrap up the FTA negotiation rounds. © Gulf Times Newspaper 2022 Provided by SyndiGate Media Inc. ( Santhosh V. Perumal
Gulf Today
05-03-2025
- Business
- Gulf Today
UK-GCC free trade deal will provide big boost to UK exporters: Mooney
A UK-GCC Free Trade Agreement could be transformational for UK food and drink exports. If secured, it could lead to reduced or eliminated tariffs on key UK exports, making British products more competitive in the GCC market, said Sarah Mooney, HM Trade Commissioner for the Middle East and Pakistan. Addressing a breakfast event in Dubai, she explained, 'Currently, UK exporters face tariffs of up to 25% on cereals, 15% on chocolate, 12% on baking products, 10% on sweet biscuits, and 5% on soft drinks. Removing these barriers would not only make British products more affordable but also enhance trade relationships and increase accessibility to high-quality UK food and drink across the region.' 'Given the GCC's appetite for premium and high-quality products, an FTA would provide a significant boost to UK exporters looking to expand their footprint in the Middle East.' About the UK's participation in the recently concluded Gulfood, Sarah Mooney revealed, 'The UK has a significant presence at Gulfood this year, demonstrating our commitment to fostering trade relationships and showcasing the best of British food and drink. We have a robust cross-section of companies exhibiting at the UK Government stand, featuring products ranging from drinks to savoury snacks and much more besides. As well as dedicated country pavilions for Wales, Scotland, and Northern Ireland, the UK's Agriculture and Horticulture Development Board (AHDB) is also exhibiting dairy and meat from Britain to highlight the UK's particular strength in these sectors. This broad presence reflects the high level of demand for British food and drink in the GCC, driven by our strong reputation for quality, provenance, and innovation.' She added, 'We see Gulfood as an important platform to strengthen trade relationships, engage with key buyers, and highlight the UK's leadership in food sustainability and production standards.' Highlighting the popularity of British food and drink in the region, Mooney said, 'British food and drink products are well respected in the GCC for several reasons. First and foremost, the UK has a globally recognised reputation for producing high-quality food and drink, underpinned by stringent food safety and traceability standards. Consumers in the region appreciate the rich heritage of British cuisine, from iconic cheeses and meats to innovative snack and beverage brands that align with modern tastes.' She added, 'The GCC market is discerning, with a growing appetite for premium, sustainably-produced goods. UK food and drink exports to the GCC reached £817 million in 2023, with the UAE alone accounting for £420 million of that figure, demonstrating the strong and growing demand.' Explaining the demand for UK products in the GCC, she said, 'The GCC market is characterized by a strong demand for premium food and beverages, and the UK is well-positioned to meet this demand. The UAE ranks among the top global markets for consumer spending on food and non-alcoholic beverages, with consumer spending per capita projected to reach £4,830 in 2025. Saudi Arabia is also seeing significant growth in its premium food segment, with 65% of Saudi shoppers indicating a willingness to pay more for quality products. British dairy, premium grocery items, and high-end snacks are particularly well-suited for this market. Additionally, high-end restaurants and hotels in the UAE and Saudi Arabia frequently reference the origin of their meat and fish, showcasing Scottish seafood and Welsh lamb as premium offerings.' Sarah Mooney concluded, 'The UK's food and drink industry has a long-standing and growing presence in the GCC, driven by strong demand for premium, sustainable, and high-quality products. The region presents exciting opportunities for UK businesses, particularly in sectors such as premium grocery, dairy, seafood, and non-alcoholic beverages. With the potential of a Free Trade Agreement on the horizon and continued investment in sustainable and innovative food production, we are confident that UK food and drink will remain a key player in the GCC market for years to come.'
Arab News
26-01-2025
- Business
- Arab News
GCC trade deal may be key to UK's economic recovery
Since the 2008 financial crisis, the UK economy has grappled with low productivity and stunted economic growth. Despite being the world's sixth-largest economy, the UK today has an unemployment rate above 4 percent, low industrial output and a housing crisis. Add to that the policy paralysis that comes with four different prime ministers in the last four years and it is clear why the UK needs to rethink its economic position. In 2024, while the UK economy showed a robust rebound in the first half of the year, in the third quarter it showed 0.0 percent growth. This year began with a sharp fall in government bond prices and a 1.2 percent loss in value in the British pound against the US dollar. The International Monetary Fund projects 1.6 percent gross domestic product growth in 2025. Having come to power last July in this troubled economic context, one of the Labour government's priorities is the establishment of a free trade agreement with the Gulf Cooperation Council, negotiations for which started in 2022 under former Prime Minister Boris Johnson. According to the government, this will lead to substantial economic benefits for the UK by potentially increasing the country's annual workers' wages by £600 million ($749 million) to £1.1 billion and adding up to £3.1 billion to GDP by 2035. Crucially, the free trade agreement has the potential to increase UK-GCC trade by 16 percent. Last September, UK Trade Secretary Jonathan Reynolds and Trade Policy Minister Douglas Alexander chose the Gulf for their first joint international visit, showing the urgency of the negotiations for the government. This commitment was reiterated in October during the government's International Investment Summit. Prime Minister Keir Starmer's December visit to the UAE and Saudi Arabia confirmed this priority. The GCC is a natural partner for the UK, given the decades-old strategic, investment and diplomatic cooperation between the two sides. UK-GCC trade stands at about $65 billion, with the Gulf as a bloc being the UK's fourth-largest trade partner. Further, initiatives like the UK-Saudi Arabia Strategic Partnership Council, the UK-UAE Partnership for the Future, the UK-Qatar Strategic Dialogue, and joint working groups with Bahrain, Oman and Kuwait have laid the groundwork for deeper cooperation across critical areas such as security, development, trade and investment. The trade negotiations have been revived at a strategic juncture, where both the UK and the Gulf states are investing in sectors of mutual interest, such as fintech, artificial intelligence, digitization and renewable energy. This has increased the avenues for cooperation between the two sides, as they are able to exchange expertise and best practices. The GCC is a natural partner for the UK, given the decades-old strategic, investment and diplomatic cooperation between the two sides. Zaid M. Belbagi Once established, the free trade agreement will facilitate easier movement of talent, allow British companies to access the fast-growing Gulf market and provide the Gulf consumer with a wider variety of goods and services. Separately, an enhanced trade regime between the two sides will increase investor confidence in the UK and the Gulf states. It may also provide the necessary momentum to the London Stock Exchange by drawing Gulf listings. While negotiations are underway, further delay is to be expected given that the GCC is not one unified, standardized economy. Each member state has its own economic priorities and existing relationship with the UK. Smaller economies such as Bahrain and Oman particularly stand to benefit from this deal. The UK has been the largest foreign investor in Oman recently, with more than $5 billion of British investment and nearly $1.5 billion in British exports over the past year. A Gulf minister familiar with the matter stated that the delay in the negotiations was due to the internal challenges in the UK. Parallel to the free trade agreement negotiations, the UK has ventured into bilateral partnerships in strategic sectors to provide further impetus to its economy. This month, the UK announced plans to sign a critical minerals cooperation agreement with Saudi Arabia at the Future Minerals Forum in Riyadh. As per this agreement, the UK would secure the long-term supply of minerals such as copper, lithium and nickel, which are critical components in electric vehicles, smartphones and AI data centers. The UK is counting on its international partners to support its economic recovery. A robust UK-GCC free trade agreement may thus hold the key to its economic recovery. Increased exports and investments are bound to have positive spillover effects on the British economy, such as job creation and increased consumer spending. Beyond these tangible benefits, a free trade agreement would also be a step toward strengthening diplomatic and strategic relations between the UK and the Gulf at a time when the former's global influence is waning. The UK has sought to restore this influence by carving out a place for itself in the region's defense, security and strategic framework, as seen in its recent joining of the US-Bahrain Comprehensive Security Integration and Prosperity Agreement. The government is also due to release its strategic defense review, which is expected to prioritize Gulf security cooperation. In light of such progress, the establishment of the free trade agreement will strengthen UK-GCC relations at a time of heightened geopolitical volatility in the Middle East. However, given the high international interest in investing in and partnering with the Gulf, significant delays in establishing the agreement may weaken the competitiveness of the UK's offering to the region. • Zaid M. Belbagi is a political commentator and an adviser to private clients between London and the Gulf Cooperation Council. X: @Moulay_Zaid
