How a Free Trade Agreement with the GCC will benefit UK business

As Her Majesty’s Trade Commissioner for the region, I’m proud to be part of today’s launch of the UK-GCC Free Trade Agreement (FTA) negotiations. Our Secretary of State for International Trade, the Rt Hon Anne-Marie Trevelyan, signed a joint statement with the Secretary General of the GCC here in Riyadh to mark the start of trade negotiations with a bloc whose total GDP in 2021 was ￡1.2 trillion.

Today’s launch is a milestone for our independent trade policy, and the fourth FTA negotiation launch for the UK this year.

Complementarity

I see two areas where there is complementarity in what we are trying to achieve from a comprehensive FTA.

Firstly, the GCC is an incredibly important export market for the UK. Pre-Covid, total trade between the UK and the GCC reached ￡44.6bn, and in 2019 the GCC was the UK’s 3rd largest export market outside the EU, demonstrating the UK’s exporting appetite into these growing markets.

Secondly, as the GCC countries undertake their economic diversity plans, or ‘Vision Strategies’, they look to partners who can work with them to advance their knowledge economies, which play to the UK’s strengths as a world leader in technology, cyber, life sciences, education, creative services, AI, financial services and renewable energy; all priority sectors in the region.

The GCC wants to import the goods and services that the UK wants to export.

Benefits to UK exporters

British companies have a role to play in partnering with GCC governments as they diversify their economies, including in renewable energy. For example, exports of UK wind turbine parts currently face tariffs of up to 15% and we will seek to reduce and remove tariffs for our goods exports, making them more competitive in the GCC market.?This will positively impact many businesses, including our food and drink, where exporters face tariffs of up to 25% for cereals and up to 15% for chocolate. UK food and drink exports to the GCC were worth ￡625m last year so lowering tariffs on these goods would make a material difference.

Investment

An FTA is also an opportunity for GCC businesses and GCC exporters who want to export to and invest in the UK.

Indeed, a successful FTA will result in an even stronger trading relationship, unlocking more opportunities for investment in both directions. The UK is a significant investor in the region, with ￡13.4bn invested in the markets of the GCC. We have also embarked on a series of investment partnerships in the Gulf including with Oman, with the UAE and most recently with Qatar. We continue to engage collaboratively with investors across the region.

Strategic areas of collaboration

The bottom line is that an FTA is good news for the whole of the UK and each of the six markets that make up the GCC.

An FTA will enable business growth in areas of long-term strategic importance. For the UK this means supporting the levelling up agenda and the ten point plan for a green industrial revolution. For the GCC this means delivering against their various Vision Strategies, and the UK is already partnering with governments and business across the Gulf to help them meet their strategic objectives.

GCC governments are investing in cleaner futures, and there is common ground between our industrial and energy strategy priorities and theirs. The Gulf benefits from abundant sunshine, which is why Solar Water is building solar desalination domes in Saudi Arabia: a carbon neutral solution to turn seawater into fresh water.

Education is a top priority in the Vision Strategies, and a UK education is in high demand across the GCC. Downe House opens its doors to students this autumn in both Riyadh and Muscat thanks to support from DIT, and in Kuwait, Derwen College has been commissioned to develop the curriculum for Kuwait’s first college for people with special education needs.

As the GCC markets grow, infrastructure is of paramount importance. Two of the eight World Cup stadiums in Qatar were designed by BDP Pattern, and in Bahrain, Bluewater Bio’s HYBACS technology being used to upgrade and expand wastewater treatment plants.

Huma’s remote patient monitoring system means that patients in the UAE can monitor and manage chronic conditions such as diabetes and hypertension, allowing them to take more control of their health whilst always being connected to their healthcare provider.

A win-win for economic growth

As the centre of economic gravity in global trade moves East, the GCC is in ascendance with its links to Asia and Africa.?A comprehensive free trade agreement will demonstrate both the UK’s ambition to strengthen economic ties with the GCC and benefit UK companies based both in the UK and here in the region.

To our partners in the GCC, I also want to stress that this FTA will be a win-win for economic growth across all seven of our markets. As the GCC develops its clean energy, manufacturing and services sectors, the UK will be a growth market you will be looking to export to, and we stand ready to support.

I have been doing business in the GCC for much of my career. When I arrived here for my first banking role, the financial crisis was just unfolding. It’s fair to say that I have seen this region face challenges and celebrate successes over the years.

Today’s launch is without doubt a success to celebrate.