UK GCC Free Trade Agreement Kicks off in Riyadh

On 22nd June 2022, The Rt Hon Anne-Marie Trevelyan, Secretary of State for International Trade of the United Kingdom and H.E. Dr Nayef Falah M. Al-Hajraf, Secretary-General of the Gulf Cooperation Council (GCC) officially announced the launch of the UK-GCC FTA negotiations. The UAE, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia are the six middle eastern nations representing the GCC bloc.

The GCC bloc qualifies as the seventh-largest export market for the UK and the demand for global products and services in these six countries is likely to grow by almost 35% to £800 billion by 2035, a 35% resulting in creating massive business opportunities for the UK companies.

Once the FTA deal is through, the GCC nations would invest more in the UK supporting its economy and generating employment in the country.

UK Trade Secretary Anne-Marie Trevelyan said, “Today marks the next significant milestone in our 5-star year of trade as we step up the UK’s close relationship with the Gulf.”

She also highlighted, “Our current trading relationship was worth £33.1 billion in the last year alone. From our fantastic British food and drink to our outstanding financial services, 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.”

The UK Trade Secretary emphasized, “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.”

The Director of an exporting house based in Liverpool, UK commented, “A strong trading relationship would allow the UK to play to our strengths as a manufacturing powerhouse and a world leader in technology, cyber, life sciences, creative industries, education, AI, financial services, and renewable energy.”

He further emphasized, “UK businesses in these industries will also 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%.”

Dan McGrail, the CEO of Renewable UK said, “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.”

He added, “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 – and to boost our own economy by exporting around the world.”

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 UAE amongst the GCC bloc has always been a frontrunner in building trade and investment relationships with the UK whose government is also seeking to strike a Comprehensive Economic Partnership Agreement (CEPA) with the UAE besides negotiating an FTA deal with the GCC. As the CEPA deal has a much wider scope compared to FTA, once struck can attract more UK companies for doing business in UAE.

Bradley Jones described the UAE-UK Sovereign Investment Partnership (UAE-UK SIP) as “quite a unique initiative” that can inspire many UK technology companies for business setup in Dubai.

He further remarked, “They are investing in cutting edge innovative projects which have high growth potentials. They can also do the knowledge transfer back to the UAE.”

In an interview with Emirates News Agency WAM, Bradley Jones, the ED of the Joint Secretariat of the UAE-UK Business Council said, “There is nothing to stop the UK and the UAE talking bilaterally about doing additional agreements.”

The UAE-UK business council is focusing on cooperation in renewable energy and other high technology sectors e.g. AI, Agritech, FinTech, advanced manufacturing, education technology, life sciences etc. that can open up new avenues of opportunities for company formation in Dubai UAE by the renewable energy and technology businesses in the UK.