LONDON: Britain is urging businesses to accelerate trade and investment partnerships with Gulf states before the formal implementation of the UK-Gulf Cooperation Council free-trade agreement — with officials forecasting billions of dollars in annual economic benefits from the deal.
UK Minister of State for Trade Policy Lord Anas Sarwar told the UK-GCC Strategic Dialogue forum in London that companies should begin pursuing opportunities immediately rather than wait for the remaining stages of the process to be completed.
The deal was signed in May, and will see tariffs removed on around 93 percent of UK exports to the GCC, worth an estimated £580 million a year based on existing trade.
While the process of ratifying the agreement is ongoing, Sarwar told the event: “Businesses do not need to wait, we do not need to wait, until we have got through the signature process, the legislative process, and are into the implementation phase.”
He added: “You’re living the implementation every day, and I want us to ramp that up between now and when we actually get to the physical signature and implementation phase, because the partnership’s more important than politicians signing agreements and bits of paper.”
Instead, he urged British and Gulf businesses to establish relationships, expand exports and increase investment, arguing the FTA’s success would ultimately be determined by the levels of commercial activity it provoked.
Beyond the FTA
GCC Secretary General Jasem Mohamed Al-Budaiwi said with UK-GCC trade hitting $70bn in 2025, and investment topping $643bn in 2024, the FTA could allow Gulf exporters to expand sales of aluminium, fertilisers and manufactured goods to the UK.
He told attendees that “the true value will be measured by productive investment impacts and the economic opportunities it creates” including possible partnership projects and the desire of both sides to deepen cooperation in technology, investment and knowledge transfer.
In that respect, Sarwar called for commitment between the parties to look beyond the possible opportunities in each other’s nations, pointing to the “huge, huge” prospects that could come from investing together in third party countries.
Kuwait’s Minister of State for Economic Affairs and Investment and Acting Minister of Commerce and Industry Abdulaziz Naser Abdulaziz Al-Marzouq said on this front that the GCC offered the UK “more than a market in its own right.”
He said: “The Gulf Cooperation Council is a gateway to the Eastern Hemisphere of the world through our established trade links with Asia.”
Chief negotiator for the GCC, Raja Al-Marzouqi, said that the FTA could generate up to $4.7 billion in annual economic benefits for the UK, with the Gulf bloc set to land some $5 billion, and bilateral trade forecast to grow 22 percent by 2050.
The agreement comes as Gulf economies seek to diversify beyond hydrocarbons and attract greater private-sector investment, while Britain looks to expand its international trade relationships.
Outgoing Lord Mayor of London Sir Alastair King said that British pension funds, which hold some $100 billion, could offer opportunities for Gulf investors to partner on projects in the region and elsewhere.
“It gives opportunities for GCC-related entities to go hunting together around the world with our really good pension funds, and that’s something that I’m really keen to see greater implementation,” King noted.