The British government's investment minster has said the third round of talks that could eventually lead to a free trade agreement between the UK and the GCC have been completed successfully and a fourth session should be held in London later this year.
Dominic Johnson, minister for investment in the Department for Business and Trade, told The National that the outcome of the talks was encouraging. The third round was held in the Saudi Arabian capital Riyadh from March 12-16, with technical discussions held on 13 policy areas over 30 sessions.
The UK government says a free trade agreement (FTA) would lead to a 16 per cent increase in trade with the Gulf Co-operation Council — comprising Saudi Arabia, the UAE, Bahrain, Kuwait, Qatar and Oman — and “add at least £1.6 billion [$1.97 billion] a year to the UK economy.”
“Very good progress has been made, which is excellent. We’re enormously positive,” Mr Johnson said.
Generally, the conclusion of the third round of talks is almost the halfway point in most negotiations towards an FTA.
“The closing stages are the important stages,” Mr Johnson, who sits in the House of Lords, told The National.
“There are normally eight rounds of a trade deal. Round three is still the relatively straightforward components. But it’s progress ― the process of negotiating with the GCC is functioning. There’s a good structure.”
Predicting or setting dates by which the ink on an FTA will be dry is not really useful in trade negotiations, Mr Johnson added.
“In the past, dates have been set, which is never useful, because both sides want to be comfortable about it. Otherwise, what you find is that you get bounced out at the end, because you have an artificial deadline ― much better to take a few more months over it and get it right.
“But we’re heading in the right direction and I would have thought that it takes about 18 months to do a sensible trade deal negotiation period.”
As often happens with international trade negotiations that occur between single countries and existing trading blocs, speculation is rife that bilateral deals may be struck on the side. There have been rumours that a bilateral agreement between the UK and the UAE might be possible before a broader GCC deal is struck.
But for Mr Johnson, the main task is to get the GCC FTA framework in place first. Then other arrangements can be made under that umbrella.
“The key is to do the GCC deal, because then other components can fit on top of that,” he told The National.
“You need a basic framework in the entire region, particularly when it comes to tariffs, services, access and those sorts of areas ― and then you can have country-specific arrangements if you want in other areas.”
But while an FTA may be some time away and will cover arrangements such as tariffs and so on, inward investment is the day-to-day job of Mr Johnson and his colleagues.
And the global marketplace for inward investment is very competitive. The minister's portfolio includes the Sovereign Investment Partnership signed between the UK and the UAE in 2021. This expanding framework covers investments in four sectors — life sciences, energy transition, technology and infrastructure — over an initial five-year lifespan.
“I want to get investment into the UK and so it’s important to remind my peers in the body politic that we’re not the only game in town,” Mr Johnson told The National.
“It’s a competitive landscape for attracting investment and so it is important that we continue to make good progress with the talks with the GCC in terms of trade, but it’s also important that we make good progress individually, country by country, in terms that they see the UK as a good place to invest.”
The UK is looking to become a tech superpower by 2030 and this week laid out a new international technology strategy aimed at achieving that.
According to the government, the UK's tech sector is the largest in Europe and the third highest valued in the world after the US and China.
“We are a top-class breeding ground for emerging tech, but being a superpower means working with our international partners to turn these nascent technologies into global industries,” UK Technology Secretary Michelle Donelan said on Wednesday.
“Our international tech strategy will ensure we deepen collaboration with our allies on the technologies of tomorrow, driving growth and prosperity for the UK while strengthening our national security.”
Working with international partners is absolutely key, Mr Johnson said.
“Inward investment is absolutely crucial,” he told The National.
“My job is to make sure that the UK government sees the need for inward investment ― how positive it is in terms of boosting our economy and how, if we get it right, we can really capitalise on our relationships with countries that have surplus capital that they need to diversify their economies with, and we’re the perfect partner for that.
“The most important thing for me to work on is that there’s digestible product in the UK. It’s not just investing in, for example, a science park in Liverpool, which is a very important thing to encourage and for our growth, but it’s also then taking some of that intellectual capital on agri-tech back to places like the UAE and developing the skill sets there as well.
“It’s a true industrial partnership, which actually is a new evolution ― it’s more complicated and it’s harder to put into effect, but it’s much more long term.”