Deputy Prime Minister Oliver Dowden has expressed hope that a free trade agreement with the Gulf Cooperation Council (GCC) can be completed by the end of the year. During a business conference in Riyadh, Saudi Arabia, Dowden emphasized the importance the UK government places on securing this deal with countries like Saudi Arabia, the United Arab Emirates, and Qatar, which are part of the GCC.
The deputy prime minister pointed out the significance of the trade relationship between the UK and the GCC, noting that the GCC is actually the UK's fourth-largest trading partner. Dowden's optimism about reaching an agreement by the end of the year was tempered by acknowledging the need for both sides to negotiate the best possible terms. This trade agreement holds importance for Prime Minister Rishi Sunak’s government, especially considering recent challenges in negotiations with Canada and India and the upcoming general election.
Deloitte projects a 35% increase in demand for imported goods and services in Gulf countries by 2045, reaching £800 billion. A trade deal with the GCC could greatly benefit UK businesses, with services accounting for more than half of UK exports to the region. Currently, UK exports to the Gulf face tariffs averaging 5.5%, and an agreement is estimated to potentially raise annual wages by £600 million and boost GDP by around £1.6 billion by 2035.
Negotiations for the free trade agreement began in 2022, presenting complexities due to the diverse and sometimes competitive nature of the six-member GCC. Challenges include differing regulatory systems and foreign investment barriers among the GCC countries. Despite tensions between the UK and the UAE on geopolitical matters, insiders familiar with the talks do not anticipate these issues hindering progress on the trade agreement.