How UK-Gulf free-trade agreement could transform global commerce

Arab Chambers summit hears call for economic partnerships based on trust

An oil tanker passes through the Strait of Hormuz, a vital trade artery between Britain and the Arabian Gulf. Reuters

No obstacles are in the way of the UK and GCC negotiations for a free-trade agreement, according to Britain's chief negotiator who said the two sides are "hard at work" on bringing the deal into place.

Tom Wintle was speaking at the Arab-British Economic Summit in London on Monday.

Three years of deliberations have convinced Tim Reid, chief executive of UK Export Finance, that there are "real opportunities" for more UK collaboration with the Arab world.

"There are lots of challenges in the world today, but forgive me, I'm going to focus principally on the opportunities," he told the event at the Hilton London Metropole.

The region's big sporting events was one area where Britain could bring "expertise in clean growth and renewable energy", Mr Reid said.

The agreement would send a "political signal" for both sides that there is trust in "valued partners". It would also make specific provisions for investors.

An FTA would help to "reduce the administrative burden" for travel in both directions between the UK and the Gulf.

A former Egyptian trade minister has said a new basis of commerce could lead to a wider transformation of the economic relationship.

The Qatari liquefied natural gas carrier Duhail sailing through the Suez Canal, one of the world's main trade corridors. AFP

Khaled Hanafy, currently head of the Union of Arab Chambers, said mutual trust was needed to address the challenges of war, climate change and rapid digitalisation, “towards a transformative model that focuses more innovation, sustainability and human capital".

“The future needs a different way of understanding, a different way of trust, a different way of mingling in the human capital between the two sides," Mr Hanafy added. "We are here today to say that we need to reconsider our economic relationship, to revisit the model."

The event, which drew hundreds of businesspeople operating between the UK and the Arab world, was mired in concerns over the escalating conflict between Israel and Iran, which could disrupt trade and shipping routes in the Arabian Gulf.

The UK has expressed support for the US’s air strikes on Iran but Arab countries are wary of further escalation.

Though trade from Arab countries with the UK has reached a about £72 billion ($97 billion), the political uncertainty in the Middle East signals the need for a different model, Mr Hanafy said.

“In our region, in the Arab countries, we believe that we have to change the [economic] model of dealing with others, specifically with the UK,” he said.

“We should not keep just focusing on targeting each other's market. This is the past. The future is different and the last few weeks have shown that we need to do something different.

“We are facing challenges … facing geopolitical realignments that might affect everybody and everybody's business as well."