UK-GCC FTA Negotiations Make Significant Progress

Chief Negotiator tells Asharq Al-Awsat deal will increase trade 16%

Tom Wintle, Chief Negotiator UK-Gulf Cooperation Council FTA, and Acting Chief Negotiator for the GCC Fareed bin Saeed Al-Asaly. (Asharq al Awsat)
Tom Wintle, Chief Negotiator UK-Gulf Cooperation Council FTA, and Acting Chief Negotiator for the GCC Fareed bin Saeed Al-Asaly. (Asharq al Awsat)
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UK-GCC FTA Negotiations Make Significant Progress

Tom Wintle, Chief Negotiator UK-Gulf Cooperation Council FTA, and Acting Chief Negotiator for the GCC Fareed bin Saeed Al-Asaly. (Asharq al Awsat)
Tom Wintle, Chief Negotiator UK-Gulf Cooperation Council FTA, and Acting Chief Negotiator for the GCC Fareed bin Saeed Al-Asaly. (Asharq al Awsat)

Chief Negotiator – UK-GCC FTA, Department for International Trade Tom Wintle revealed that the UK and Gulf Cooperation Council (GCC) countries have made “good progress” in negotiations to sign a free trade agreement (FTA).

Speaking on the eve of the third round of talks kick off between the parties in Riyadh, he told Asharq Al-Awsat that both sides are eager to strike an ambitious, comprehensive and modern deal.

He estimated that the deal would help increase trade between the UK and GCC by no less than 16% and increase the UK’s GDP by around £1.6 billion.

What does the UK aim to achieve from this third round of negotiations in Riyadh?

My team and I are excited to be in Riyadh for Round 3 of negotiations. We have made good progress so far and we want to keep the momentum going. This week we have an opportunity to work with GCC colleagues to build on our work and tackle some of the more challenging parts of the deal.

A free trade agreement (FTA) between the UK and GCC will be a substantial economic opportunity for all of our countries, and a significant moment in the UK-GCC relationship.

How many negotiators are involved from both sides?

In total, more than 100 UK negotiators from across our government are taking part in this round of negotiations. Round 3 is taking place in a hybrid fashion, with a number of UK negotiators travelling to Riyadh and others taking part virtually. We expect similar numbers of GCC negotiators.

How optimistic are you regarding reaching a deal? And do you have a targeted timeline for concluding the negotiations and signing the deal?

There is strong political will on both sides. The UK and GCC have committed to negotiate an ambitious, comprehensive and modern free trade agreement fit for the 21st century. We’ve made significant progress for such an early stage of negotiations and have discussed every policy area in negotiations so far.

We have always been clear that negotiating an ambitious agreement is more important than meeting any particular deadline. Our aim is to secure a deal that delivers the maximum possible benefit for businesses on both sides.

If a deal is signed, what impact will it have on trade between the UK and the GCC?

A UK-GCC FTA will be mutually beneficial for the UK and GCC economies. Our economies complement one another and there is limited direct competition between our businesses. A trade deal will strengthen supply chains, helping to grow the domestic industries that we each are specialized in.

Our analysis shows that a deal is expected to increase trade between the UK and the GCC by at least 16% and increase UK GDP by around £1.6 billion in the long run. A highly ambitious FTA, which the UK is pushing for, could deliver even greater gains. So, the more ambitious we are in negotiations, the greater the gains for everyone. It is a win-win scenario.

Which policy areas are discussed in the negotiations? And which are excluded?

We have discussed all areas that are included in some of the most ambitious and modern FTAs that have been agreed upon around the world in recent years. This involves going beyond the arrangements we already have in place to remove barriers, improve the business environment and make it easier to invest in each other’s economies. We have also discussed working together on modern areas of trade, such as innovation, digital and the environment.

We are keen to do a deal that would bring the biggest possible benefits to UK and GCC businesses. An FTA can support the GCC countries’ Vision Plans and enhance the private sector's ability to drive economic growth. We have genuinely complementary economies and there are exciting opportunities in all sectors.

The GCC is equivalent to the UK’s seventh largest export market. A deep, comprehensive FTA with the whole bloc will deliver the greatest economic and strategic benefits for both sides.

Our priority is an ambitious agreement with the whole of the GCC and there is strong political will from all sides. Within this agreement, there is the opportunity to secure additional commitments where some members can go further. We will make full use of these opportunities to ensure we maximize the benefits with individual GCC Member States.

Has Brexit bolstered the UK’s negotiating position?

The UK took control of its trade policy when we left the European Union. We are the fifth biggest economy in the world and the second biggest services exporter. Now we are independent we can negotiate modern, comprehensive and ambitious FTAs with partners like the GCC.

We have already signed trade deals with 71 countries, plus the European Union that account for £814 billion of trade, and we are now negotiating new deals with GCC, India, Canada, Mexico and Israel.

By the same token, do current economic woes in the UK weaken its negotiating hand?

The UK was the fastest-growing economy in the G7 last year, with capital investment at record levels of around £600 billion maintained over the next five years. We are the sixth biggest investor in the GCC, with a total of £31 billion invested in the last 20 years. Our bilateral trading relationship increased by 76% according to the latest annual figures, from £23.6 billion to £54.5 billion. However, the real strength of our relationship is measured in decades and centuries: ours is a long-term partnership, not one based on economic cycles.



Ukraine Threatens to Halt Transit of Russian Oil to Europe

A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo
A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo
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Ukraine Threatens to Halt Transit of Russian Oil to Europe

A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo
A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo

A top aide to Ukrainian President Volodymyr Zelensky on Friday said Kyiv would halt the transit of Russian oil across its territory at the end of the year, when the current contract expires and is not renewed.

Mykhailo Podolyak said in an interview with the Novini.Live broadcaster that current transit contracts for Russian supplies that run through the end of the year will not be renewed.

“There is no doubt that it will all end on January 1, 2025,” he said.

Kiev says it is prepared to transport gas from the Central Asian countries or Azerbaijan to Europe, but not from Russia, as it is crucial for Ukraine to deprive Russia of its sources of income from the sale of raw materials after it attacked its neighbor well over two years ago.

The contract for the transit of Russian gas through Ukraine to Europe between the state-owned companies Gazprom and Naftogaz ends on December 31.

Despite the launch of Russia's full-scale invasion of Ukraine in February 2022, the Ukrainians have fulfilled the contract terms - in part at the insistence of its European neighbors, especially Hungary.

But the leadership in Kiev has repeatedly made it clear that it wants the shipments to end.

Meanwhile, the Czech Republic energy security envoy Vaclav Bartuska said on Friday that any potential halt in oil supplies via the Druzhba pipeline through Ukraine from Russia from next year would not be a problem for the country.

Responding to a Reuters question – on comments by Ukrainian presidential aide Mykhailo Podolyak that flows of Russian oil may stop from January – Bartuska said Ukraine had also in the past warned of a potential halt.

“This is not the first time, this time maybe they mean it seriously – we shall see,” Bartuska said in a text message. “For the Czech Republic, it is not a problem.”

To end partial dependency on the Druzhba pipeline, Czech state-owned pipeline operator MERO has been investing in raising the capacity of the TAL pipeline from Italy to Germany, which connects to the IKL pipeline supplying the Czech Republic.

From next year, the increased capacity would be sufficient for the total needs of the country’s two refineries, owned by Poland’s Orlen, of up to 8 million tons of crude per year.

MERO has said it planned to achieve the country’s independence from Russian oil from the start of 2025, although the TAL upgrade would be finished by June 2025.

On Friday, oil prices stabilized, heading for a weekly increase, as disruptions in Libyan production and Iraq’s plans to curb output raised concerns about supply.

Meanwhile, data showing that the US economy grew faster than initially estimated eased recession fears.

However, signs of weakening demand, particularly in China, capped gains.

Brent crude futures for October delivery, which expire on Friday, fell by 7 cents, or 0.09%, to $79.87 per barrel. The more actively traded November contract rose 5 cents, or 0.06%, to $78.87.

US West Texas Intermediate (WTI) crude futures added 6 cents, or 0.08%, to $75.97 per barrel.

The day before, both benchmarks had risen by more than $1, and so far this week, they have gained 1.1% and 1.6%, respectively.

Additionally, a drop in Libyan exports and the prospect of lower Iraqi crude production in September are expected to help keep the oil market undersupplied.

Over half of Libya’s oil production, around 700,000 barrels per day (bpd), was halted on Thursday, and exports were suspended at several ports due to a standoff between rival political factions.

Elsewhere, Iraq plans to reduce oil output in September as part of a plan to compensate for producing over the quota agreed with the Organization of the Petroleum Exporting Countries and its allies, a source with direct knowledge of the matter told Reuters on Thursday.

Iraq, which produced 4.25 million bpd in July, will cut output to between 3.85 million and 3.9 million bpd next month, the source said.