At first glance, little seems to connect disparate items such as medical equipment, luxury cars, chocolate or butter. This week, however, four years of talks and a 2,000-page agreement brought them together. Such goods may be among the cheaper, more available British exports on sale in the Gulf as part of a milestone free-trade deal struck between London and the GCC.
It is a major moment for both parties. The UK has codified a strategic and significant trade relationship with the six-nation bloc in what is a big step forward for its post-Brexit trading relations. The GCC nations combined are equivalent to the UK’s 10th-largest trade partner, with demand for imports to the group forecast to double by 2050. For the GCC, the deal is its first free-trade pact with a G7 nation and builds on the deep historical and people-to-people ties that have existed with the UK for decades.
However, the deal announced by UK Prime Minister Keir Starmer on Wednesday has implications that go beyond the flow of goods and services. A little more than 12 months ago, the globalised world economy experienced several abrupt shockwaves caused by the revival of protectionism in the form of sweeping trade tariffs. In April 2025, the International Monetary Fund stated that “effective tariff rates at levels not seen in a century and a highly unpredictable environment” led it to revise down its global growth forecasts. “Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions,” it added.
This uncertainty peaked last year but did not begin there. In 2017, US President Donald Trump pulled the world’s largest economy out of the 12-nation Trans-Pacific Partnership. Three years later, his administration sought the renegotiation of the North American Free-Trade Agreement with Canada and Mexico. Last year’s blizzard of trade tariffs upended previously solid economic relationships and led some observers to question the future of globalised free trade.
Since then, many economies have adapted – as has the idea of free trade itself. Whereas some large-scale agreements, such as the TPP, have faltered, other relationships have been forged. In March 2024, the India-EFTA Trade and Economic Partnership Agreement was signed after 21 rounds of negotiations. The Indonesia-Eurasian Economic Union free-trade deal signed in December last year promises to reduce tariffs on trade goods by 90 per cent. These are just two examples but now they have been joined by the six countries of the GCC agreeing with the UK to reduce barriers to trade and prosperity.
Of course, GCC countries independently have their own bilateral trade agreements. The UAE has concluded more than 27 Comprehensive Economic Partnership Agreements with a multitude of countries including India, Indonesia, Jordan and Costa Rica. Many more are under discussion.
Far from disappearing, free trade is realigning. As established deals falter or are outgrown by key signatories, free trade is springing up in regional, bilateral or trilateral formats. We are seeing a mixed global economy take shape, one that is not wholly defined by free trade or protectionism. In this economy, more countries are signing deals which reject the idea that there has to be “winners” and “losers” in international commerce. With patience, a little give and take and the right approach, all sides can emerge as winners.
