UK urged to seek standalone trade deals with Gulf states

• UK-GCC trade talks in third year
• Bilateral deals likely after bloc pact
• GCC agreement would be ‘baseline’

Trade experts, including a former UK government senior advisor, are questioning why talks between the UK and GCC to secure a free trade agreement are taking so long.

Many recommend that London pursue bilateral deals with Gulf countries if and when a wider GCC deal is signed.

“[The negotiations] have been going on for yonks so we should be further on than we are now,” said Edward Lister, co-chairman of the UK-UAE Business Council and once a strategy adviser to former prime minister Boris Johnson. 

He said there are questions as to why the UK did not pursue separate deals with Gulf states in the first place, and that countries are likely to seek bilateral deals once a bloc pact is in place. 

“You cannot underestimate the importance of a direct deal between two countries,” Lister said. 

The UK and six-nation Gulf Cooperation Council have been in advanced talks to broker an FTA for three years, having been started by the UK’s previous Conservative administration. 

The Labour government has indicated that it remains committed to securing a deal it estimates could increase bilateral trade by 16 percent. This equates to an extra £8.6 billion ($11.5 billion) a year in trade between GCC countries and the UK.

The UK government and the GCC launched a seventh round of talks in September. This was followed by a GCC delegation visit to London in January and a trip to Riyadh by the UK’s chief negotiator in February, according to the Department for Business and Trade. 

“Negotiations are progressing at pace, with the priority being to get the right deal for both sides,” a department spokesperson told AGBI.

A UK-GCC FTA is likely to provide the foundation for additional deals between the UK and individual Gulf states, said Simon Penney, chief executive of consultancy Incrementum and a former UK trade commissioner to the Middle East. 

“As and when an agreement is reached, there would be an appetite to go further with countries that wish to do so, offering them more ambition. 

“An FTA would act as a baseline with individual flex on top,” Penney said.

Alana Li, Middle East analyst at think tank Asia House, agreed. “A deal would pave the way for the UK to enhance commercial relationships across the region, potentially leading to deeper bilateral agreements with individual economies such as the UAE.”

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Sticking points in the negotiations could include choosing the best jurisdiction to resolve trade disputes, Lister said, and removing complex non-tariff barriers such as standards and procedures affecting foreign companies, according to Li. 

“The Gulf states are not a homogeneous bloc,” she said. “Differing economic priorities and regulatory frameworks can complicate collective negotiations.” 

The GCC has signed free trade agreements with New Zealand, Singapore and the European Free Trade Area, among others.

The UK is unlikely to pull out of negotiations at this late stage, however, as it could be perceived as “a vote of no-confidence” in the GCC.

Given the backdrop of US president Donald Trump’s tariffs, trade deals are “more important than ever before” and this should encourage both sides to move swiftly towards an agreement, Lister said.