UK-GCC trade talks based on ‘substance over speed’

gov.uk

Negotiations between the UK and GCC over a free trade agreement are focused on “substance over speed”, Simon Penney, Britain’s trade commissioner for the Middle East, says.

The third round of talks are due to take place by the end of the first quarter, with previous rounds of discussions having concluded in September and December last year.

They are building towards the ultimate signing of a free trade agreement, which is scheduled for the end of this year.

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However, despite enjoying a longstanding relationship with countries in the region, he admitted they would be taking nothing for granted.

“I’m always very clear to people on the UK Government side,” Penney said. “Yes it is true [that we have a longstanding relationship], but that must in no way breed complacency.

“We are very privileged in some respects that we do come from a position of historical strength, but the competition is going up all the time.”

And he said they would not be rushed into inking a deal.

“If it was speed you could do something in as long a time as it takes lawyers to draft something,” he said. “It’s been clear that it’s more about substance over speed.”

The GCC is the UK’s third-largest export market, after the US and China. UK exports to the Arab League totalled £28 billion ($34.54 billion) in 2021. Of this, £22.4 billion of all UK exports went to the GCC.

UK government analysis shows that an FTA with the GCC is expected to boost trade by at least 16 percent, add at least £1.6 billion a year to the British economy and contribute an additional £600 million to UK workers’ annual wages.

“Negotiating with six countries is always going to be harder than one, but we haven’t yet experienced that,” Penney said.

“Inevitably there will be areas where six countries will have different views on certain issues. Quite what they’ll be and where they’ll be we haven’t got there, but so far so good.”

Penney was speaking during the 15th edition of Abu Dhabi Sustainability Week, where the UK had a strong presence of 12 companies on its country pavilion – the first time it has ever occupied a stand at the event.

“We’ve had to turn companies away on to other stands because the stand wasn’t big enough to accommodate the UK interest,” he said.

“There are so many British companies here, not only promoting their wares, but also looking out for investment from Abu Dhabi and the UAE.”

Both the UAE and UK have set a 2050 deadline to reach net zero and this week signed a memorandum of understanding to enhance collaboration in the energy sector. 

An energy transition white paper, produced by the UAE-UK Business Council and released earlier this week, sets out recommendations for how the two countries can work together to meet national and global targets in the run-up to Cop28, which will be held in Dubai at the end of this year.

Chief among them are to set up a joint team and series of workshops to define the scope of their collaboration. 

This group should discuss commercial opportunities in areas such as hydrogen, carbon capture, biofuels, aviation fuels, nuclear small modular reactors and advanced modular reactors, fusion energy, renewables, nuclear decommissioning and waste storage, and industrial decarbonisation.

“The Middle East is a major source of interest in global technology,” Penney said.

“A lot of the ideas and solutions won’t come from here, but it’s the ability of companies from here to partner on that growth stage.”