Simon Penney predicts services will be at heart of GCC-UK trade deal

The GCC’s foreign direct investment holdings in the UK rose to £15.7 billion in 2020

Simon Penney, UK trade commissioner for the Middle East, at the Arab Health conference. Chris Whiteoak / The National

With the post-pandemic track record of massive growth in UK exports of services to Saudi Arabia, Simon Penney, the country's regional trade envoy, has told The National that a forthcoming Free Trade Agreement will breakdown barriers across an unprecedented range of sectors.

Speaking at the second Arab British Economic Summit in West London, Mr Penney said GCC-UK trade patterns were already reforming in real time and the FTA would seek to capture the most dynamic parts of the evolving relationship.

"The GCC, if you take it in aggregate, is the United Kingdom's third-largest export market globally outside the European Union," he said. "Outside of the European Union, its the US, it is China, and the Gulf is already an incredibly important trading partner for the United Kingdom."

Formal negotiations for the FTA were launched in June and Mr Penney sees an outcome that would be a win-win for both sides.

"Primarily its going to be about addressing market access barriers," he said. "We need a comprehensive agreement, it needs to be ambitious – through regulatory alignment, regulatory harmony, where we can.

"The areas we will be focusing on are industries that are subject to regulatory barriers, looking at harmonising and easing regulations to make it easier for UK companies to be doing business in the Gulf. And that's something that's across the piece to win. Its one of the fundamental principles outside of tariffs."

The explosion of interest in UK activity in Saudi Arabia under Vision 2030 was a driver that defied the Covid-19 triggered downturn in international trade for the UK.

"We've now seen that Saudi Arabia has become the UK is largest export market for goods and services since Covid and has been driven almost exclusively by continued growth in UK exports of services to Saudi," he said. "I think what you're seeing there is UK companies playing a very significant role in a lot of consultancy and advisory work that going on around delivery of Vision 2030."

With the UAE representing the biggest regional market for UK goods, Mr Penney is eyeing a strength in the healthcare sector.

"The UK is very much recognised as a global leader in that and in fact Arab Health (2023) coming up in January in the UAE and it's probably gonna be one of our largest trade representations for a very, very long time in terms of the number of UK companies that will be represented there," he said. "Healthcare really has been and will continue to be a major, major centre of opportunity.

"UK companies operating in these sectors have huge expertise already in the region with an appetite to do significantly more," he told the hundreds of delegates gathered at the ABES, which was organised by the Arab British Chamber of Commerce.

"Tamer, the Middle East's leading healthcare distribution company, has agreed a five year deal to bring UK company Huma's market leading technology platform to power "hospitals at home" with remote patient monitoring for the 34 million people living the Kingdom of Saudi Arabia".