The UK has sealed a “historic” trade deal with the Gulf Cooperation Council, worth an estimated £3.7bn to the economy every year.
The long-awaited agreement – the first between a G7 country and the grouping of Middle Eastern nations – would bolster the UK’s partnership “with a strategically vital region and secure economic resilience at home”, said the government, and had the potential to increase bilateral trade by 19.8% against 2040 projections.
The GCC consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and has a combined GDP of £1.9 trillion. The Department of Business and Trade said the deal reflected “our shared commitment to open trade, mutual prosperity, and long-term economic success”.
The agreement removes tariffs on UK food exports, medical equipment and advanced manufacturing, plus includes “first-of-its-kind” GCC commitments on the free flow of data.
Once fully implemented, an estimated £580m in export duties will be removed per year as part of the agreement, based on current UK exports to the GCC.
Some £360m worth of this would be removed on day one of the agreement entering into force – “as well as renewed certainty for services firms, making it easier for UK companies to expand and partner in the Gulf, and supporting high quality jobs for years to come”, DBT said.
It added the agreement would also boost UK wages by £1.9bn against 2040 projections due to the increased opportunities for British businesses in the region.
The deal marks the fifth trade agreement to be signed by the Labour government, following deals with India, the US, the EU and South Korea.
“This is a landmark deal for British food and farming,” said Defra secretary Emma Reynolds.
“From Welsh lamb and Scottish salmon to English cheddar, our world-class produce will now reach Gulf markets tariff-free, creating major new opportunities for UK farmers and food businesses,” she added.
“This government has secured a deal that backs British farmers while protecting our high food, animal welfare, and environmental standards. Simply put, we are boosting exports, supporting rural jobs and driving economic growth.”
The trade deal was a “huge win for British business, and for working people who will feel the benefits in the years ahead through higher wages and more opportunities”, said prime minister Keir Starmer.
“The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment.”
And at a time of “increased instability, today’s announcement sends a clear signal of confidence”, claimed business and trade secretary Peter Kyle. It gave UK exporters “the certainty they need to plan ahead and reinforcing the strength and stability of the UK’s trading relationship with the Gulf at a critical moment”, he added, referencing the impact of the Middle East conflict.
Holland & Barrett group CEO Anthony Houghton also hailed the deal’s announcement.
“The Gulf is strategically important for us, as we continue our growth journey and expand our international presence,” Houghton said. “Fair, reliable and low-barrier trading is essential for businesses to compete and expand internationally with confidence. This agreement provides that stability, supporting companies like ours to grow and serve customers across the region.”
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