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#TradeTuesday: UK eyeing long-term success in the Middle East

By Harry Brown
06 December 2022

By Harry Brown & George Esmond

As the England football team eyes success in the Middle East, the UK Government also has its eyes on a middle eastern prize - in the form of a trade deal with the Gulf Cooperation Council (GCC).  

Hosts of the 2022 FIFA World Cup Qatar are one of six members of the GCC. Other members are Bahrain, Kuwait, Oman Saudi Arabia and the UAE. The allegiance of nations situated along the Persian Gulf has a GDP of over £3.4 trillion and a population of just over 65 million people. An agreement with the GCC provides the British government with an opportunity to strike one of its most lucrative post-Brexit trade deals.  

For context, the GCC was founded in 1981 in Abu Dhabi. All founding members remain the six current members, and all states are ruled by monarchies. The head of state of each nation represents their country through the blocs governing body known as the Supreme Council.  

Each member of the Council has one vote with a majority needed for proposals to pass, and the presidency is rotated annually on an alphabetical basis. The GCC functions much like the EU, with its charter seeking more than just economic unity with a focus on integration in various fields such as education and culture, social and health affairs as well legislative and administrative affairs. The GCC also has its own military function known as the Peninsula Shield Force and has close relations with Egypt, Jordan and Morocco.  

The GCC is already an important trading partner, with almost £22 billion of UK exports and bilateral trade worth over £30 billion completed in 2020. The UK government has forecasted that a free trade agreement with the GCC could add £1.6bn annually to the UK economy and increase bilateral trade by as much as 16%. 

Currently, the UK imports oil and gas from the region, and in return, sells manufactured products such as arms, aircraft and cars. The UK is now seeking to further the existing relationship with gulf countries and has already carried out the first phase of trade talks, with over 33 rounds of negotiations taking place between August and October. 

The government is aiming for a deal that allows British businesses to seize new opportunities, particularly in renewable energy and farming. Currently, the GCC imports virtually all of its food and the UK hopes a deal paves the way for the £600 million in food and drink exported in 2021 to be massively increased. Furthermore, as the gulf region looks to move away from a reliance on oil, British expertise in renewable technologies, such as solar, has been marked as a priority area in any agreement.  

Like the world cup though, the negotiations have come with scrutiny. Chair of the APPG on Democracy and Human Rights in the Gulf, Brendan O’Hara MP, accused the UK of hypocrisy over the potential deal. Government representatives have repeatedly stressed in both houses of parliament that the UK continues to underline the importance of human rights to the Gulf States when faced with questions from a large number of Lords and MPs concerned with the human rights record of Gulf nations.  

Nevertheless, just like FIFA, the government seems determined to engage with the Gulf region and make a success of a free trade agreement.  Negotiations will continue into 2023 with hopes of a deal being reached before 2024. When the final whistle blows in Qatar on the 18 December, the three lions might be going home, but the UKs new relationship with the Gulf is just kicking off.