Britain wants its trade agreement with the Gulf Co-operation Council signed within weeks as it seeks deeper economic ties with a region whose importance to global energy, investment and trade is critical amid the six-month Iran war.
Anas Sarwar, the UK’s new Minister of State for Trade, said the country was ready to sign the GCC agreement and begin preparatory work towards a deeper bilateral agreement with the UAE.
Mr Sarwar, who is due to be elevated to the peerage on Thursday, chose the Gulf for his first trip outside Europe since taking up the trade portfolio, travelling first to Saudi Arabia and then the UAE before leaving the Emirates on Wednesday.
“We’re ready to sign the GCC deal,” Mr Sarwar told The National. “We’re ready to start the preparatory work on what a bilateral agreement would look like, between the UK and the UAE.”
“I want this to be discussions that are talking about weeks rather than months. Certainly don’t want to be discussions that are going on for years.”
Backdrop of war
His visit comes as the economic consequences of the Iran war are again coming into focus after renewed US-Iran fighting and attacks on shipping around the Strait of Hormuz.
Two supertankers carrying Saudi crude were struck by unidentified projectiles while leaving the strait on Tuesday. Each was carrying two million barrels of oil.
Traffic through Hormuz was down to about five ships on Monday, compared with a 10-day average of about 14, according to Kpler data.
UK Minister of State for Trade
The disruption has turned one of the world’s most important energy corridors into an increasingly significant geo-economic chokepoint. About a fifth of global oil supplies passed through Hormuz before the war, while restrictions on shipping have contributed to higher energy prices and forced Gulf governments to reassess the resilience of export routes.
Oil prices rose about 2 per cent on Tuesday after the renewed hostilities raised fears of further disruption to Middle East energy supplies.
Against that backdrop, Mr Sarwar said his choice of Saudi Arabia and the UAE for his first trip outside Europe was deliberate.
“It’s not a coincidence that we’re here in the Gulf,” he said.
Mr Sarwar said Britain wanted to demonstrate “a solidarity with this region”. He continued to regard the Gulf as a partner for peace, security, prosperity – and for economic ties.
Trade and economic security
Negotiations on the UK-Gulf free trade agreement began in June 2022 and concluded in May this year, after almost four years of talks. The agreement is now awaiting signature before going through the domestic procedures required for it to enter into force.
The Gulf as a whole would represent the UK’s 10th-largest trading partner, with bilateral trade worth £53 billion ($71 billion) in 2025, according to UK government data provided to The National.
The agreement is expected to increase bilateral trade by 19.8 per cent in the long run, adding $20.96 billion annually. It would eliminate tariffs faced by UK exporters worth an estimated $784 million a year based on current trade, with $486 million removed on day one, the UK government said.
British food and drink exports to the GCC were worth more than $1.13 billion in 2025, while UK car exports to GCC countries reached $1.89 billion.
Mr Sarwar placed the push for Gulf trade within a wider shift in the global economy, where protectionism, strategic competition and supply chain security are increasingly shaping government policy.
He spoke of “rising economic insecurity that comes from rising protectionism”, and challenges around domestic supplies and key industries.
There were also questions about getting the balance right on relationships with China, the US and the EU, he said.
“We cannot allow that to become a broader principle of protectionism.”
Instead, Britain wants to become “the most connected economy in the world”, Mr Sarwar said, with the UAE and wider Gulf playing a significant role.
UAE next
He said the anticipated Gulf trade deal should be the foundation for deeper relationships with individual countries across the region.
"I want to also start the work of an important bilateral relationship between ourselves and the UAE, and we’re not going to wait. Those conversations have already begun. Partnerships have already begun.”
During his UAE visit, Mr Sarwar held what he described as a positive and energetic meeting with the Minister of Foreign Trade, Dr Thani Al Zeyoudi, focused on turning the relationship into new deals, and visited DP World for talks on investment and infrastructure.
UK-UAE trade was worth £25 billion in 2025, making the Emirates Britain’s largest Gulf trading partner and 20th largest globally, according to UK government figures.
The UAE-UK Sovereign Investment Partnership has delivered more than £30 billion of investment commitments into Britain since 2021.
The UK is also the largest holder of investment stock in the UAE, according to the British government, while more than 10,000 British businesses are based in the Emirates and more than 200,000 British nationals live there.
Mr Sarwar said he wanted investment to flow both ways.
“I want to see more investments from the Gulf, the UAE and Saudi in particular, coming into the UK, but I also want to see investment going from the UK into this part of the world as well,” he said.
The groundwork predates the current push. In July, shortly after Prime Minister Andy Burnham’s new government took office, UAE ambassador Mansoor Abulhoul said the “building blocks” were in place for a UK-UAE Comprehensive Economic Partnership Agreement.
Energy and strategic investment
The economic consequences of the Iran war are already being felt in Britain. Fitch Ratings expects higher energy prices stemming from the conflict to curb UK economic growth to 0.9 per cent this year, while inflation is forecast to rise to 3.7 per cent by year-end.
Mr Sarwar said Britain needs investment in electricity generation, its grid and energy storage to support economic growth and rising demand from AI and technology.
“We’re going to have to get the investments we need to build up our grid and the storage and transportation of our energy, so we make sure we can get to every part of the country at a good price, that drives down the cost of living as well as drives down the cost of doing business and attracts investment into our country.”
Renewables and small modular nuclear reactors were among the potential investment areas he highlighted, alongside aviation, ports, defence, AI data centres and financial and legal services.
Britain cannot meet those ambitions through public funding alone, he said.
“We need private-sector investment, of course, as well as public-sector investment, but we also need foreign direct investment to come into the UK and we’re not shy about that.”
Britain also wants to invest in UAE infrastructure. Mr Sarwar said discussions during his visit included opportunities around railways and airports, with UK expertise, investment and export finance potentially supporting their expansion.
A good place to do business
Mr Sarwar acknowledged that the conflict had created perceptions of instability but strongly rejected the suggestion that companies should retreat from the UAE.
UK Minister of State for Trade
“The UAE is a good place to do business,” he said. “It was yesterday, it was a year ago, and it is today, and it will be tomorrow, and it will be next year, and it will be into the future.”
He also reaffirmed Britain's security commitment to the region.
“We have a defence obligation. To our allies and partners in the Gulf,” Mr Sarwar said.
The conflict also raised questions of economic resilience, he said, including “how we build and protect our supply chains and the free flow of our supply chains”.
Asked about contingency planning if the conflict and high energy prices persisted, Mr Sarwar said: “We have to plan for every possibility and every outcome.”
His message to businesses considering the region, however, was that investment should not be put on hold.
“This place is working, it's a good place to do business, it's a good place to build those partnerships, and we don't need to wait,” he said.
