Britain's head negotiator in the talks aimed at creating a trade deal between the UK and Gulf Co-operation Council states told a London conference that “both sides are working flat out, but it’s about getting the right agreement”.
Speaking at the 3rd Arab-British Economic Summit, Tom Wintle said that while the fifth round of trade talks had recently concluded in Riyadh, there was a long road ahead and a potential free trade agreement is about “the deal, not the date”.
Negotiations began in August last year and are expected to last for another seven rounds. The UK's Business and Trade Minister, Dominic Johnson, said a “massive boom” in trade with the region was under way and a GCC free trade agreement would underpin the significant demand that British businesses were determined to tap into.
“Doing a deal is very much in everyone’s interest,” he told The National. “These things are never straightforward. There are always complexities and sensitivities around the edges.
“If you don’t do the right deal and you don’t do it properly, then it either doesn’t work and falls apart, or you just end up with a glitch towards the end that can’t be resolved, because people feel they’re being penned in. If you take a 10-year view, what’s an extra six months?
“This is a political process more than it’s an economic one, and once that’s achieved then the economics can take over.”
According to the UK government, the GCC was equivalent to the UK’s seventh largest export market and total trade was worth £61.3 billion in 2022.
In the long run, a free trade agreement (FTA) with the GCC is expected to increase trade by at least 16 per cent.
Mr Wintle said that e-commerce had to be a central pillar of any future agreement and that developments in technologies such as artificial intelligence would be closely monitored.
The agreement also had to include chapters on emerging businesses.
“It’s reaching that modern, progressive and ambitious agreement that really delivers for businesses,” he added.
Good, not rushed
The prospect of an agreement is certainly exciting many businesses, not least the Sri Lankan conglomerate Mackwoods, which operates in the health, property and renewable energy sectors.
Founded in 1841, Mackwoods was originally a tea company and still provides luxury tea products to the British royal family.
Observing that Dubai has become one of the world's top tea exporters, Mackwoods recently opened an operation in the UAE.
“The first step was to set up in Dubai,” company chairman Chris Nonis told The National.
“The next step is to serve the Mena [Middle East and North Africa] region and to have warehousing and packaging operations in Dubai itself, because it’s really following the path of other major tea companies.
“We all look forward to the progress of the FTA, because I think that will bode well for all the countries.”
Even though a UK-GCC agreement has not yet happened, trade between Britain and the Gulf is booming. Total trade between the UAE and the UK is up 47.3 per cent and between the UK and Saudi Arabia, it rose 32.8 per cent over the past year.
“A lot of the trade we’re doing today is not even taking advantage of possible free trade agreements,” Simon Penney, a former UK trade commissioner for the Middle East and now head of the Middle East at Gemcorp Capital, told The National.
“I can only conclude that once we make trade even easier through an FTA, which will reduce some of barriers and eliminate a vast majority of tariffs, we’re only going to see those trade numbers grow stronger.”
While a free trade agreement is still the prize, many observers continue to advocate patience and prudence.
“The more progress we can make now with the current agenda, the better,” Chris Innes-Hopkins, UK executive director at the Saudi British Joint Business Council, told The National.
“I think it’s difficult to put a timeline on it. It’s better to come out with a good agreement rather than a rushed agreement that isn’t going to work and comes undone.”