The UK and the Gulf Cooperation Council have kicked off the first round of trade talks in Riyadh in a deal that could cover more than £33bn in annual trade.
The GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, would be equivalent to the UK’s seventh-largest export market, with demand for international products and services in the region expected to rise to £800bn by 2035.
The deal itself is expected to be worth around £1.6bn a year to the UK economy.
These latest talks follow similar discussions with Canada and Mexico earlier this year.
UK international trade secretary, Anne-Marie Trevelyan, commented on the kick-off of trade negotiations that: “Today marks the next significant milestone in our 5-star year of trade as we step up the UK’s close relationship with the Gulf.
“Our current trading relationship was worth £33.1 billion in the last year alone. From our fantastic British food and drink to our outstanding financial services, I’m excited to open up new markets for UK businesses large and small, and supporting the more than ten thousand SMEs already exporting to the region.
“This trade deal has the potential to support jobs from Dover to Doha, growing our economy at home, building vital green industries and supplying innovative services to the Gulf.”
Key winners from any trade deal would include British farmers and producers, whilst tariffs on items such as chocolate, baking products, biscuits and smoked salmon could all be cut.
A trade agreement would also open up the door to more inward investment from the Gulf into the UK, with investments from the region already supporting around 25,000 jobs in the UK alone.
The government has promised a ‘bonfire’ of the current barriers to international trade for exporting business in the UK.
International trade secretary, Anne-Marie Trevelyan made the announcement as part of a new drive to reduce red tape and barriers to exports around the world – estimated to be worth £20bn in economic benefit for British firms.
There are 100 priority issues that have been identified by the Department for International Trade, including regulations on meat exports to Asia, rules delaying British medical devices entering South Africa, and restrictions on UK lawyers operating in Japan.
The move is part of ongoing post-Brexit work to strengthen or create new trading routes for UK businesses outside of the EU.
Trevelyan said in a statement that: “Every week we remove trade barriers somewhere around the world, helping more and more businesses all over the country.
“We know that businesses who export pay higher wages and are more productive than businesses who do not, but too often, complex trade rules and practical obstacles prevent them selling overseas.
“This bonfire of the barriers will grow our economy by allowing our brilliant businesses to satisfy the enormous global appetite for their goods and services.”
Whilst Brexit has caused major upheaval for the majority of import/export businesses in the UK, leaving the European Union has allowed the UK government to pursue independent trade agreements around the world, as well as addressing specific blockers on British trade.
These include opening the Chinese market for UK lamb for the first time, worth £1.5bn a year, as well as beef in South Korea which within the next five years is hoped will open a market worth £2.5bn to British producers.
So far, the DiT has identified and resolved around 400 trade barriers in the last two years, including barriers for individual businesses, including VetPlus where overcoming bureaucratic issues enabled the Lancashire-based firm to export pet supplements to India in a move worth £1.4m.
VetPlus EMEA regional manager, Anthony Stewart, commented that: “Being able to meet the different compliance requirements across the markets we operate in is extremely important to ensure the availability of our products for vets and pet owners.
“Recently, we ran into a challenge in exporting our products to India and the support from the DIT was fantastic. They were able to put us in touch with the right people to help us liaise with the Indian authorities and facilitate the appropriate documentation to enable us to re-start the export of our products to India.”
Trade woes for UK businesses in the face of Brexit are continuing into 2022 as exports to the EU fall to their lowest level since 2011.
Data newly released from Eurostat shows how EU imports from the UK fell by 16.4% over a two-year period. In start contrast, imports by the EU from non-EU countries rose by 30% over the same period.
The heightening trade imbalance is due to a number of factors, including the UK’s departure from the EU. But Covid-19 also had and continues to play a big factor. Eurostat’s report notes that ‘the COVID-19 crisis caused both exports and imports between the EU and the United Kingdom to fall in 2020. Imports reached a minimum of € 7.5 billion in January 2021. By December 2021 they had recovered to € 13.5 billion. Exports reached a minimum of € 14.8 billion in April 2020. By December 2021 they had recovered to € 24.8 billion’.
Despite the fall in UK exports into the EU, last year the United Kingdom was still the second-largest partner for EU exports of goods, and the fourth largest partner for UK imports of goods.
The UK’s trade deficit has been growing weaker across the board, with data from the Office of National Statistics showing the difference between goods and services imported rose to its highest level since 1997, rising to £51.7bn in Q1 this year.
However, economists from both Eurostat and the ONS have noted that the latest data should be treated with some caution due to a change in methodology.