UK seeks Gulf trade boost as talks start to secure deal


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The UK is seeking a significant increase in trade with the six Gulf Cooperation Council states as it launches talks to secure a deal that skirts the contentious issue of human rights.

International trade secretary Anne-Marie Trevelyan said the prospective agreement would target a £1.6bn annual boost to the UK economy, from increased exports of manufactured goods and agricultural produce to financial and digital services.

“We are looking to do a really comprehensive, ambitious and modern, forward-thinking FTA (free trade agreement),” she said. “I don’t want to limit it to goods . . . we will be creating the footprint for all our sectors.”

During the negotiations, the GCC is expected to push for its own preferential access to the UK market by seeking the reduction of tariffs and other barriers.

The talks kick off on Wednesday in Riyadh, Saudi Arabia, where the GCC headquarters are based. The other members of the Arab bloc include Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.

The GCC collectively forms the UK’s seventh largest export market, representing £33.1bn in annual bilateral trade; demand for goods and services in the region is expected to grow by 35 per cent to £800bn by 2035, according to the UK.

Thani Al Zeyoudi, the UAE’s minister of state for foreign trade, said the talks presented a “big opportunity” to grow UK-GCC trade and seal an agreement that would strengthen links “with a trusted trading partner, further diversify supply chains and accelerate knowledge transfer”.

The UK believes a deal could deliver “significant benefits” to British farmers and manufacturers. GCC tariffs on goods imports are generally set at 5 per cent with some much higher, such as cereals at up to 25 per cent and chocolate up to 15 per cent.

The negotiations will avoid sensitive discussions over human rights in the Gulf, where states face criticism for repressive policies, including the murder of critical Saudi journalist Jamal Khashoggi and the UAE’s detention of British academic Matthew Hedges for alleged spying.

British nationals trapped in archaic legal systems often complain about a lack of government support in securing justice.

Expressing any UK “anxieties” over human rights would remain the responsibility of the Foreign Office, Trevelyan said. But enhanced trade links would allow the UK to engage more effectively on rights issues, she added.

Gulf states also come under scrutiny for lax standards and poor conditions for the region’s large number of migrant workers, many of whom arrive in debt, leading to circumstances akin to forced labour.

Anne-Marie Trevelyan, UK international trade secretary: ‘We are looking to do a really comprehensive, ambitious and modern, forward-thinking FTA (free trade agreement)’ © Peter Nicholls/Reuters

As part of any trade agreement, Trevelyan said the UK would ask the Gulf states to reaffirm their commitments to standards set by the International Labour Organization, as well as environmental standards enshrined in the Paris agreement on climate change.

She said the Gulf states would benefit from greater access to UK business, including clean energy technology as the bloc’s members work towards reducing large carbon footprints.

GCC members such as the UAE and Qatar have recently signed large investment partnerships with the UK. Boris Johnson, UK prime minister, continues to court Gulf investment into the post-Brexit economy and recently met Saudi Arabia’s de facto leader, Prince Mohammed bin Salman, among other regional leaders.

Officials said the timeframe for any GCC trade pact would depend on the willingness of the bloc to negotiate a substantive deal, pointing to the UK’s ability to move at pace when sealing previous agreements with Australia and New Zealand.

Relations between the GCC nations have been fraught in recent years, including a Saudi-led embargo on Qatar that ended last year. Since then, Riyadh has also raised tariffs on an array of goods to protect its economy.

Some GCC members, including the UAE, have privately raised the prospect of concluding bilateral agreements with the UK, given the difficulty in finding common ground within the bloc.

Trevelyan said she was committed to finalising a GCC deal first. It may not be as ambitious but could act as “a starting point” ahead of discussions with those who “want to go further”.

“I am very happy to look at that in due course,” she said.

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