UK-GCC talks must extend beyond tariffs, say top diplomats

Reuters/John Sibley

• Lord Udny-Lister calls for new routes to market
• UAE Ambassador to the UK wants quick solutions
• Free trade deal will lead to increased investment from the Gulf

The newly-commenced free trade agreement talks between the UK and the GCC have been welcomed by senior diplomats.

Lord Udny-Lister, co-chair of the UAE-UK Business Council and a former strategic advisor to British Prime Minister Boris Johnson, hailed the FTA discussions as “great news”, but called for a wide and nuanced set of agreements that extend beyond simple tariffs.

“Let’s be blunt, FTAs are normally about tariffs and what really needs to be discussed are the bilateral agreements – such as creating new routes to market and the standardisation of professional services,” Lister told AGBI at a London conference organised by Dubai FDI.

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Lister cautioned that it’s still “very early days” in the FTA talks cycle.

“Once the tariffs are discussed, it will then evolve into bilateral issues. There are a wide range of topics that will start to come through in the next few months regarding each country specifically. 

“As soon as we can start moving into those discussions that would be helpful,” he said, adding that the UAE-UK Business Council would be “lobbying hard” for mutually beneficial corporate interests.

“We want to encourage UK businesses to invest in Emirates and vice-versa.

“It’s important to us to create deals that support businesses in both countries. For any alliance to work, it has to be win-win. It’s a very exciting time,” Lister said.

Officials from the GCC and UK agreed to work rapidly towards a comprehensive FTA in December last year as both parties seek to cement their post-Brexit trading relationship.

The deal has been publicly reported to close by Q4 2022, but Lister has predicted a longer timeline. “It’s unlikely to be done by then,” he disclosed to AGBI in May.

Full steam ahead

UAE Ambassador to the UK Mansoor Abulhoul said the UK-GCC FTA talks have been “long awaited.”

“It’s really great that Britain is moving at this speed and we hope that this pace will be maintained,” Abulhoul said. 

The diplomat cautioned that the FTA talks must be comprehensive and go beyond mere tariff deals.

“We welcome this news with great interest,” he said. “However, the UAE also represents a huge part of UK-GCC bilateral trade and we want to ensure the cadence is kept up on these talks too.

“The UAE has a lot to offer – particularly on environmental investment areas.

“We play a key feature in negotiations. It’s great we have reached this stage and our team will all keep a laser focus in terms of moving fast with these talks.”

Abulhoul stressed that tariff talks represent “the bare minimum” necessary for fruitful economic cooperation between the GCC bloc and Britain.

“I think it will be a lot more than tariffs and so it should be. It’s going to go a lot deeper and particularly for the UAE,” he said. 

“We understand from the UK government that they have built in a framework that allows countries to go further and deeper in the agreements, and we think the UAE can.

“I wouldn’t like to get ahead of the game but you know that in the UAE we like things to happen fast.”

Reuters/Mohamed Azakir

Also speaking at the London event, Baroness Elizabeth Symons, chairman of the Arab British Chamber of Commerce and senior Labour member in the House of Lords, said successful FTAs “should be about standards and incentives and so much more.”

“However, the best thing is that these talks have begun,” Symons added.

As the UK’s seventh largest export market, GCC demand for international products and services is expected to grow to £800 billion ($976 billion) by 2035, a 35 percent increase – heralding colossal opportunities for UK businesses.

A free trade deal would also open the door to increased investment from the Gulf, supporting and creating jobs across the country, according to the British government.

The FTA talks are expected to culminate in a trade deal worth £1.6 billion more a year to the UK economy, an increase of 16 percent, government analysis shows.

UK firms had invested £13.4 billion in Gulf economies as of 2020, while GCC firms had £15.7 billion invested in the UK in the same period.