UK launches negotiations for free trade deal with GCC

The UK launched free trade negotiations on Wednesday, June 22 with Gulf Co-operation Council (GCC) countries to unlock opportunities for further investment.

UK’s trade secretary, Anne-Marie Trevelyan, who launched the talks in Riyadh, said: “Our current trading relationship was worth £33.1bn in the last year alone. 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.”

? Great to be in Riyadh to launch negotiations for a new trade deal with @GCC and meet my Gulf trade counterparts
?? ?? ?? ?? ?? ?? ??

I look forward to deepening our important trade & investment relationship that will help grow the economy across the UK ?? ? pic.twitter.com/kw3rgYxPYN

— Anne-Marie Trevelyan (@annietrev) June 22, 2022

A deal with the GCC is expected to increase trade by at least 16 per cent, add at least £1.6bn annually to the UK economy and contribute an additional £600m or more to UK workers’ annual wages, according to government analysis. UK firms have at least £13.4bn invested in GCC economies and GCC firms have £15.7bn invested in the UK as of 2020.

Gulf investments supported over 25,000 UK jobs in 2019, tripling over the previous decade. The deal would also be estimated to boost the economies of Scotland, Wales and Northern Ireland by almost £500m collectively.

The deal would also benefit British farmers and producers, given the Gulf region’s dependence on imported food. British food and drink exports to GCC countries were worth £625m last year, while a deal could potentially reduce or remove tariffs on UK food and drink exports. Tariffs that could be slashed include cereals, which face a tariff of up to 25 per cent; chocolate, up to 15 per cent; baking products, up to 12 per cent; sweet biscuits, up to 10 per cent; and smoked salmon, which has a 5 per cent tariff at present.

Thank you to @GCC Secretary General H.E. Nayef Falah M. Al-Hajraf for hosting us in Riyadh ?

Excited to work with you, and all @GCC members, on an ambitious, modern trade deal that will grow our economies and bring huge opportunities for our people.

Trade = Growth = Jobs pic.twitter.com/4wu6rNxEgr

— Anne-Marie Trevelyan (@annietrev) June 22, 2022

The GCC’s demand for international products and services is expected to grow rapidly to £800bn by 2035, a 35 per cent increase, signalling new opportunities for UK businesses. A free trade deal would also open the door to increased investment from the Gulf, creating jobs across the country, a statement said.

??? Day 2 of my Gulf visit in UAE – a partner that invested £12 billion+ in the UK economy in 2020.

It’s great talk to @Mubadala CEO Khaldoon Al Mubarak about global trade + the huge investment opportunities across the UK.

Investment = jobs = growth pic.twitter.com/ubd7WZIawA

— Anne-Marie Trevelyan (@annietrev) June 23, 2022

“It is also extremely helpful that the UK and GCC are committed to work towards seeking the opportunities from ‘green innovation’, which will bring significant opportunities for Britain’s innovative renewable energy companies which are already leading the way in this area of global concern,” added Stephen Phipson, CEO of Make UK.

Around 10,700 small and medium-sized businesses from the UK exported goods to the GCC in 2020, with SMEs accounting for more than 85 per cent of total UK goods exporters to Qatar, Saudi Arabia and the UAE. In turn, UK businesses will support GCC countries as they diversify their economies to move away from a reliance on oil and towards other sectors.

It is the fourth set of free trade agreement (FTA) negotiations launched by the trade secretary this year, following visits to India, Canada and Mexico.