The United Kingdom is on the brink of finalizing a free trade agreement with countries in the Middle East, including Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, Oman, and Bahrain. This deal, which could increase trade by $2.1 billion annually, is part of Prime Minister Keir Starmer’s vision to enhance the British economy and restore international partnerships post-Brexit.
Annual trade between the UK and the Gulf Cooperation Council (GCC) member states is currently valued at $73 billion. The new free trade agreement could amplify this by an estimated 16%, adding significant value for British businesses and strengthening ties with the Gulf—a region that is the UK’s seventh-largest trading partner.
The UK’s Department of Economy and Trade emphasized the importance of such agreements, stating, “We are committed to a modern trade deal with the Gulf States, aiming to deliver real value for businesses on both sides.” Unlike previous trade deals with set timelines, the focus here is on maximizing economic impact.
A Win for Labour’s Foreign Trade Agenda
For Starmer’s Labour government, which has yet to sign any major free trade agreements since taking office, this deal represents a potential triumph. Starmer campaigned on promises to reinvigorate international relations and drive foreign investment into the UK. Free trade agreements are key to this strategy, helping to lower tariffs and remove trade barriers to create better opportunities for UK businesses.
Since leaving the European Union in 2020, the UK has faced challenges in negotiating trade agreements, managing only to secure deals with Australia and New Zealand. While talks with the US and India have slowed, the Gulf deal suggests momentum for Labour’s broader foreign trade ambitions.
Strategic Gulf Partnerships
The Gulf States, with a combined GDP of over $2.2 trillion—on par with Brazil—offer lucrative prospects for the UK. Already, the region holds free trade agreements with New Zealand and Singapore, and negotiations with the EU, India, and China are in progress. However, such discussions often span years, underlining the significance of the UK reaching a final agreement with the Gulf in a relatively short timeframe.
The anticipated deal could set a new tone for UK trade policy, marking a pivotal step in Starmer’s effort to position the UK as a key player in global markets.
