'Historic' UK trade deal with Gulf states set to add billions to British economy
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The deal is the first of its kind between the GCC and a G7 country, and will scrap tariffs on billions of euros worth of British exports.
The United Kingdom has signed a landmark trade agreement with the Gulf Cooperation Council (GCC), expected to inject more than €4 billion a year into the British economy.
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The deal is the first of its kind between the GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, and a major G7 country.
Under the agreement, up to 93% of GCC tariffs on British goods will eventually be eliminated, wiping out around €670 million in annual duties on UK exports. Around two-thirds of those reductions will take effect as soon as the deal enters into force.
UK exports ranging from cheese and butter to medical equipment and manufacturing goods stand to benefit, while services firms will gain deeper market access across finance, engineering, legal and consulting sectors.
Deal hailed as a “huge win”
The British Prime Minister Keir Starmer hailed the agreement, calling it a “huge win” for British workers and businesses, and reiterated the government’s commitment to drive growth, support jobs and strengthen the economy.
“The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment,” Starmer added.
Peter Kyle, the business and trade secretary, echoed those statements, saying the deal sends “a clear signal of confidence” in a period of global uncertainty and trade upheaval.
Meanwhile, the GCC Secretary General, Jasem Mohamed Albudaiwi praised the agreement as a successful culmination of intense negotiations and called it part of a broader vision for “sustainable and promising economic growth” for all parties involved.
Albudaiwi added that deeper strategic partnerships formed by the deal would benefit both the UK and the GCC at a time when economies in the region are ramping up diversification efforts beyond hydrocarbons, investing heavily in logistics and emerging technologies.
RelatedBusiness leaders have also welcomed the trade accord, with many seeing the Gulf as a bright spot to invest and expand into. They also highlighted opportunities in green technology, infrastructure, healthcare and professional services.
“The GCC is a region of growing strategic importance and long-term opportunity, and one where HSBC’s heritage runs deep,” said Georges Elhedery, Group CEO of banking giant HSBC.
“We see first-hand the opportunity this agreement can unlock and stand ready to help deepen economic ties and support businesses to connect, invest and grow,” he added.
The agreement also marks a big step in improving conditions that would encourage companies to expand confidently in the Gulf region.
“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,” said Anthony Houghton, CEO of Holland & Barrett.
Trade in a post-Brexit world
Industry experts say the deal underscores the growing economic importance of the Gulf region to the UK, as London seeks to broaden trade partnerships beyond Europe.
According to the Chartered Institute of Export & International Trade, food and drink exports from the UK to the GCC already exceed €720 million annually, with tariffs of between 5% to 25% on products like confectionery and specialty cheeses that are now set to be reduced or removed.
Marco Forgione, director general of Chartered Institute of Export & International Trade, said the UK-GCC trade deal would “unlock substantial new markets for British exporters” in sectors like advanced manufacturing and renewable energy.
Another outcome could also be opportunities emerging from major Gulf infrastructure projects linked to regional trade diversification efforts, which have been prompted by the disruptions in the Strait of Hormuz.
With UK-GCC trade currently totaling roughly €66 bn every year, the new deal would boost bilateral trade flows by up to 20% over time.
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