UK and UAE, Saudi trade agreements could be ’hammered out’ this year
Arabian Business | 3 May 2021
UK and UAE, Saudi trade agreements could be ’hammered out’ this year
As the pace of post-Brexit UK-Gulf trade activity and investment continues to ramp up, official free trade agreements (FTAs) could be signed by the end of the year, according to experts.
Referring to the GBP800 million UAE life sciences commitment to the UK’s Sovereign Investment Partnership (SIP) in March and the recent confirmation by UK Middle East trade officials to Arabian Business of upcoming "billion dollar deals" in clean energy, Wes Schwalje, a Gulf-government advisor and COO of research firm Tahseen Consulting, said: "It seems likely that free trade agreements will be hammered out by the end of the year with both the UAE and Saudi Arabia. There is a lot of political capital being spent now on getting to the finish line on a free-trade agreement."
UK Trade Secretary Liz Truss, who is leading Britain’s global FTA programme, was in the UAE and Saudi Arabia last month to work on the UK-GCC Joint Trade and Investment Review, following the successful launch of the Egypt-UK Association Agreement in December 2020 and The Jordan-UK Association Agreement on 1 May this year.
"The UK has a strong ambition for a trade deal and is working with the GCC and its member states on key opportunities and challenges," Simon Penney, Her Majesty’s Trade Commissioner for the Middle East and Her Majesty’s Consul General Dubai told Arabian Business. "Having left the EU this year, the UK now has independence over its trade policy: We have the freedom to determine terms on which we do business around the world. We have launched an ambitious FTA programme and see the GCC as a critically important partner," he said.The UK would be concluding its Joint Trade and Investment Review with the GCC in June this year, Penney revealed.
"It is tough to gauge how long in-country counterparty approval can take. Since the UAE is one of the UK’s most significant regional trading partners, these talks and consultations are high stakes and are likely to last until October," Schwalje commented.
"These agreements will provide a framework for trade liberalisation, enhanced political cooperation, and joint cooperation on priority issues such as education, climate change, and technology," he added.
Lord Edward Lister, co-chair of the UAE-UK Business Council, told an online forum last week that the UK has started "formal steps" for a free-trade agreement with the Gulf countries.
"There is a lot of work under way at the moment – consultation is shortly about to start on it – on new trade arrangements into the Gulf, which will be a free-trade agreement," he told an online forum. "That’s a major piece of government work."
The new agreements are set to deepen existing UK-UAE trade and investment ties that were worth GBP32 billion ($44.3 billion) in 2019.
The Gulf is Britain’s third-largest export market outside the EU, after the US and China. Total trade in goods and services between the UK and the bloc totalled GBP44.5 billion ($61.5 billion) in 2019.
"It will be interesting to see if the FTA develops into a GCC agreement or is purely bilateral with the UAE. Previously, it has always been mooted as a GCC exercise," commented Joe Hepworth, CEO of Dubai-based trade and investment advisory firm British Centres for Business.
"Trade deals typically get stuck on sectors that, over the years, have become highly emotive and visible in domestic politics, such as fisheries, agriculture and legacy primary industries like steel," he said. "There wouldn’t appear to be obvious clashes or large-scale competition here between the UAE and UK in these areas, which ought to make things easier."
