UK PM resignation unlikely to affect Gulf trade talks

Thomson Reuters/POOL

Boris Johnson said on Thursday he was resigning as Britain’s prime minister, bowing to calls from ministers in his Conservative Party.

“The process of choosing that new leader should begin now,” Johnson said at the door of Number 10 Downing Street.

“And today I have appointed a cabinet to serve, as I will, until a new leader is in place.”

The resignations from the government and party exceeded 50 on Thursday, as Northern Ireland Secretary Brandon Lewis became the first cabinet member of the day to quit, quickly followed by other ministers.

Johnson received a heavy double blow this week when two of the UK’s most senior cabinet ministers – chancellor Rishi Sunak and health minister Sajid Javid – announced their resignations within minutes of each other, both stating that they questioned Johnson’s ability to run a government that adhered to the highest standards.  

Support for Johnson evaporated further amid a turbulent 24 hours, highlighted by new chancellor, Nadhim Zahawi, who was only appointed to his post on Tuesday, calling on his boss to resign.

The Conservatives will now have to elect a new leader, a process which could take about two months. 

Gulf trade deal in motion

In June, Britain and the Gulf launched talks for a UK-GCC trade deal, with diplomats hopeful of sealing agreements within the next few months.

However, experts have said Johnson’s departure and Britain’s parliamentary crisis are unlikely to affect the direction or speed of the FTA discussions.

From chocolate to solar power, the UK-GCC trade deal is a winner

Lord Udny-Lister, co-chair of the UAE-UK Business Council and a former strategic advisor to Mr Johnson, told AGBI: “The UK and the UAE have a deep and substantive long-term trade and investment relationship. This will not be affected by a change of political leadership in the UK. 

“Likewise, I am sure that the momentum of UK and GCC trade negotiations will be sustained – regardless of which Prime Minister is in power in the UK, companies in both markets stand to benefit significantly from such a deal, and there is a strong commercial and political interest in reaching this deal as soon as is practical.”

Chris Doyle, director of the Council for British-Arab Understanding, said: “Boris wasn’t very involved in the minutiae of the GCC deal talks, so his departure is unlikely to have any impact. The civil servant machine will keeping moving on the red tape.”

Scott Livermore, chief economist at Oxford Economics Middle East, added: “While the Conservatives remain in power then there is likely continuity in economics and trade policy to the Middle East.

“It was Boris’ credibility that got wiped out rather than the Conservative party wanting to move in a different direction.”

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.

*With Reuters