UK Labour government revives free-trade talks with Gulf states

Following a brief hiatus for the UK's general election, Britain's newly-elected Labour government has expressed a strong desire to resume negotiations on a free-trade agreement with the Gulf Co-operation Council (GCC) and other key international partners.

With the UK standing as the world's fourth-largest exporter in 2022, boasting exports valued at £855 billion, international trade is a critical focus for Prime Minister Keir Starmer. His economic strategy prioritizes growth, and expanding global trade relations is a vital component of this agenda.

Jonathan Reynolds, the secretary of business and trade, unveiled the government's new trade strategy aimed at driving economic growth.

The strategy includes initiating talks with the GCC, India, Israel, South Korea, Switzerland, and Turkey. "Our trade programme is ambitious, targeting the UK's strengths to grant British businesses access to dynamic global markets," Reynolds stated.

He emphasized the government's commitment to entering negotiations swiftly, with a clear focus on creating new opportunities for UK businesses to support job creation and economic growth.

The most recent round of FTA negotiations between the UK and the GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, concluded in February. The Labour government anticipates the next round to occur later this year.

The previous discussions covered 21 policy areas across 30 sessions, demonstrating substantial progress and a mutual dedication to establishing a comprehensive, modern agreement that meets 21st-century standards.

As of 2021, the trade relationship between the UK and the GCC was significant, with over £19 billion invested in each other's economies. Total trade between the two regions is estimated to be around £59 billion.

An FTA with the GCC could enhance this relationship further, providing British businesses with greater access to a burgeoning market and offering UK consumers a wider array of choices.

The decision to resume trade talks has been positively received by British business groups. William Bain, head of trade policy at the British Chambers of Commerce, noted that businesses are eager to deepen trade links with key partners.

He highlighted that new or upgraded trade agreements could unlock opportunities for businesses across various sectors, including spirits, business services, climate-friendly technology, and pharmaceuticals.

The UK already maintains FTAs with Israel, South Korea, Switzerland, and Turkey, which were carried over following the UK's departure from the EU in 2020. Prior to the recent election, negotiations with these countries focused on updating these agreements to reflect current economic realities.