UK Government Hails Trade Deal With Gulf States

LONDON, May 21 (PA Media/dpa) -- The UK has become the first G7 country to agree a trade deal with a bloc of Gulf states, in an agreement the government said would boost the economy by an estimated £3.7 billion every year.

The deal with the Gulf Cooperation Council (GCC) – an alliance including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates – would also increase domestic wages by £1.9 billion ($2.54 billion) annually in the long run, the government said.

Under the free trade agreement, tariffs will be removed on exports such as food, medical equipment and advanced manufacturing, while the deal includes “first-of-its-kind” GCC commitments on the free flow of data.

An estimated £580 million in duties a year will be removed, based on current UK exports to GCC countries, once the agreement is fully implemented.

Negotiations on the deal began four years ago, when the expectation was that the deal could boost UK gross domestic product by £1.6 billion.

GCC states combined are equivalent to the UK’s 10th largest trade partner, with demand for imports to the bloc forecast to double by 2050.

Current bilateral trade amounts to about £53 billion. 

The deal is projected to increase this by 20%, with UK exports making up two-thirds of that trade.

Duties totalling £360 million will be removed as soon as the agreement comes into force, with “renewed certainty” for services firms paving the way for UK companies to expand in the Gulf, supporting “high-quality jobs for years to come”, the government said.

The Press Association understands negotiators were able to achieve more than originally expected on the liberalization of tariffs.

The GCC currently imports about 85% of its food, with goods including cereals, cheddar cheese, chocolate and butter among those expected to become tariff-free.

For the first time, the GCC has made commitments on the free flow of data requirements, enabling UK businesses to work in the Gulf without having to store data in the region.

In another first, the GCC has made commitments on anti-corruption, in a chapter which includes animal welfare, environment, innovation, labour and women’s economic empowerment.

The government did not seek a specific human rights clause in the deal.

The agreement also preserves the UK’s right to regulate, with no requirements to alter UK standards.

Prime Minister Keir Starmer said: “Today’s agreement is a huge win for British business, and for working people who will feel the benefits in the years ahead through higher wages and more opportunities. This government has now secured five major trade deals with international partners, delivering on our commitment to drive growth, support jobs and strengthen the UK economy.

“The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment.”

--NNN-dpa