Cutting red tape will catapult UK businesses into the GCC

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While it may be hard to think beyond all the political drama in London, the centrepiece of the UK’s post-Brexit agenda has been to forge free trade agreements (FTAs) with countries and governments throughout the globe. 

A key piece of this effort has been focused on the Gulf.

The countries comprising the Gulf Cooperative Council (GCC) – namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – are fundamental to the UK’s business sector. 

Put together, these countries make up the UK’s tenth largest trading partner. Prior to the pandemic bilateral trade hit £41.4 billion in 2019. 

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Much of that is admittedly in oil and gas shipments to the UK. But if both parties have their way this will change, and pretty soon – a deal is expected to be done before the end of 2023. 

So, what can we expect from a UK-GCC trade deal?

Two areas of interest to the Gulf in particular are sustainability and technology. 

These complement efforts being made by GCC countries to both diversify and decarbonise their economies. 

Saudi Arabia is eager to bring in new technologies for projects such as NEOM. 

The UAE is seeking new ideas that will help modernise specific areas of its economy, such as manufacturing.

It also aims to contribute to sustainability-related regulations in the run up to COP28, which will be held in Dubai in 2023. 

The UK is well positioned to engage in both areas, given its strong research capabilities. 

One asset the UK’s government is keen on promoting is its Catapult research network. 

Set up in 2010, Catapult offers cutting-edge R&D infrastructures to both prove and adopt breakthrough products, processes, services and technologies. 

It works with businesses across select industries, including manufacturing, space, health, digital, energy, transport, telecoms, and the urban environment. 

Its aim is to create breakthrough ideas for use in the UK and abroad. 

We can expect the UK to tap into its innovation and research network in efforts to sell any free trade deal to the GCC.

Another area that Britain will want to address is red tape. 

There’s been much talk in the UK about reducing complexity for business, especially for industries like the food sector. 

As highlighted by the think tank Asia House, negotiators will look towards non-tariff barriers covering regulations, standards and procedures, which increase trading costs and business complexity. 

The UK government applies 61 non-tariff measures on GCC-based businesses. However, the GCC applies 4,798 non-tariff measures on UK firms. 

The removal of these measures will simplify market access for UK firms, and increase their willingness to do business in the Gulf.

One favourite area of investment for GCC investors is in the UK’s property market. 

London has traditionally been the focus for Gulf-based investors. 

Landmark properties are owned by both individuals and organisations from countries such as Kuwait, Qatar, Saudi Arabia and the UAE. 

Increasingly, GCC investors are looking outside of London, at cities such as Manchester. 

Some large scale deals have come under media scrutiny given a lack of due process and transparency, such as the Manchester Life deal with Abu Dhabi. 

Because of the housing squeeze, fewer UK citizens can afford home ownership. A lack of new affordable housing projects also persists.

Therefore, the UK government has to tread a fine line on attracting real estate investment whilst ensuring that there are affordable options for UK citizens.

Whatever the outcome of the negotiations between the UK and GCC governments, both sides will be hoping for a win-win that will benefit their respective business communities. 

The UK in particular will be looking to the Gulf as a market of significant opportunity for high-growth areas.

Alex Malouf is a marketing communications executive who has spent the past 18 years in the Middle East