Post-Brexit trade talks between UK-GCC to resume ‘soon’, says minister

The Qatar dispute has delayed discussions on a free-trade deal between Britain and the Gulf

Talks on a post-Brexit trade deal between the UK and the GCC are set to resume "soon" after the diplomatic crisis with Qatar put discussions on ice, a British minister told The National.

“We’ll be meeting again soon,” said Graham Stuart, minister for investment, referring to the trade working group between Britain and the GCC that was set up to explore a free trade deal after the UK leaves the European Union.

The working group was set up in December 2016, using the Singapore-GCC trade deal as a template for a future relationship. And initially, it “made good progress” according to Mr Stuart.

But talks stalled after the dispute between Qatar and its Arab neighbours broke out last summer. Saudi Arabia, the UAE, Egypt and Bahrain cut ties with the country on June 5 over Doha’s support for terrorism and meddling in the internal affairs of countries in the region.

The diplomatic stand-off meant a high-profile UK-GCC summit in London last year, which was hailed as the first GCC meeting to be held outside the Gulf, never got off the ground.

There have been concerns that Qatar's place in the GCC could be in doubt should the dispute worsen. For Britain, the uncertainty throws a spanner in the works as it seeks to sign quick free-trade deals around the world to compensate for a reduction in trade with the EU after Brexit.


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The UK government has frequently championed the importance of British trade with the GCC, a relationship that was worth £30 billion in 2016.

No wonder, then, that the GCC is “near the top of our priority list” when it comes to post-Brexit trading opportunities according to Mr Stuart. “We just think there are tremendous opportunities going forward.”

Looking specifically at the UAE, Mr Stuart said that trade between the two nations stood at close to £15 billion in 2016. “I know there’s the appetite to see that grow to £25 billion,” he said. “The last target that was set for UK-UAE trade was beaten early.”

The minister highlighted a number of key areas in which British trade with the Emirates could be quickly expanded.

“In terms of the areas of opportunity for us, you’ve got energy,” he said, pointing out the UAE’s investment in nuclear. “Education is already very strong and to be built on further… there’s financial services, obviously we work very closely together there, healthcare, fintech… there’s a whole list.”

The priority for the British government, he said, is to ensure continuity in trade after Brexit, which he explained as “[replicating] as closely as one can the current situation and moving that over to a new one that creates no disadvantage on either side”.

“Then going forward, we will look at the advantages of whether we should be doing something more agile, which is less than a full FTA [free trade agreement], or whether the correct route is the FTA.”

So what would be less than a full free-trade agreement? “It could be picking a couple of areas where there are such straightforward win-wins that you could easily and quickly conclude an arrangement,” Mr Stuart said. “All this becomes possible, of course, to start negotiating and indeed ratifying after March next year [when the UK officially leaves the EU], and the GCC will be near the top of our priority list, but as I say, the first thing to do is to ensure continuity.”

Britain’s ability to strike its own trade deals depends on whether or not it leaves the customs union, a contentious issue in the Brexit debate.

The cabinet is split on the matter, with Brexiteers arguing that Prime Minister Theresa May’s preferred option of a “customs partnership” – in which the UK collects tariffs on behalf of the EU – would make it impossible for Britain to make trade deals with non-EU countries.

Others have proposed a solution known as “maximum facilitation”, which uses technology to reduce the need for customs checks after Brexit.

For Mr Stuart, there is no question that Britain will exit the customs union, even if the alternative is not yet clear.

“We will be leaving the customs union,” he declared. “So… we will be conducting an independent trade policy, and that will require specific arrangements with third parties including the GCC.”

Mr Stuart voted “Remain” in the 2016 EU referendum. But he says that since taking on his new role in the trade department earlier this year, he has come to think that given the way the global economy is going, with an increasing focus on services, “Britain is tremendously well placed”.

“The world economy’s changing,” he said. “Our economy’s greatest strength is in services and any forward look on the global economy expects an increasingly important role for services.”

The minister highlighted Britain’s leadership in areas such as AI, fintech, financial services more broadly, professional services, clean growth and the creative industries. These are also areas in which the UK hopes to work increasingly with the UAE, which last year appointed the world’s first ever minister of Artificial Intelligence.

“I’m just finding the nature of our economy and the focus it has is tremendously well placed,” he said. “As services become a more important part of the global economy, then the focus of trade talks may shift and we’ll be spending more time talking about data flows than we talk about goods.”

It doesn’t mean the EU doesn’t have a legitimacy, he added, but it makes it harder to argue that the UK outside of the union will be particularly disadvantaged.

“If you’ve got good cards, it’s all about how you play them,” he said. “Given the way the world economy is developing, I think the UK holds a very strong hand of cards.”