Gulf Cooperation Council countries and the United Kingdom have entered a new era of comprehensive strategic cooperation, following the official announcement in London of the conclusion of free trade agreement negotiations between the two sides.
This represents a structural shift that enhances investment flows and opens wide horizons for business communities in the seven markets, in the first agreement of its kind concluded by the GCC with a G7 nation.
The General Coordinator for Negotiations and Head of the GCC Negotiating Team, Dr. Raja Al Marzouqi, described the agreement as an inevitable strategic step to redirect joint trade and investment flows, especially at a time when the global economy is grappling with high levels of uncertainty and protectionist fluctuations.
Al Marzouqi told Asharq Al-Awsat that the current volume of trade between GCC countries and Britain stands at the equivalent of $80 billion, indicating that the agreement is expected to increase trade exchange by more than 60 percent, based on experiences from similar free trade agreements worldwide.
Mitigating Negative Impacts
He added that the agreement's signing comes at a sensitive time for the global economy, amid rising risks associated with US decisions regarding increased tariffs and the cancellation of some previous trade agreements, which amplifies the need for a stable and clear legal environment governing international economic relations.
Al Marzouqi explained that the agreement contributes to mitigating the negative effects of these changes by reducing risks and providing a clear future vision, given its detailed and mutual legal commitments between the two parties within a comprehensive free trade framework.
He also pointed out its comprehensive nature, which is not limited to traditional goods but extends to establish integrated frameworks for investment, services, and modern financial services sectors.
Gateway for Technology and Knowledge Transfer and Investment Attraction
The GCC official indicated that free trade agreements are among the most prominent tools for attracting foreign investment and technology transfer, noting that the experiences of several countries have shown an increase in foreign investment flows by more than 30 percent after signing similar agreements.
He affirmed that the importance of the GCC-British agreement is enhanced by Britain's position as a major exporter of technology and foreign investments, which provides GCC economies with additional opportunities to expand the base of quality investments and transfer advanced knowledge and technologies.
The General Coordinator for Negotiations emphasized that this step, in conjunction with other trade agreements concluded by GCC countries with major Eastern economies, primarily China, maximizes the benefit from the region's strategic location as a link between East and West, and supports the adoption of balanced economic relations with various international partners.
A New Phase
For his part, HSBC Group CEO Georges Elhedery affirmed that the GCC countries represent a region of increasing strategic importance, given the long-term growth opportunities they offer.
He noted that the banking group has a historical and deep presence in the six GCC states, in addition to the United Kingdom, which is one of the bank's key markets.
Elhedery told Asharq Al-Awsat that the bank's presence in the region allows it to directly identify the opportunities that will arise from the new agreement, affirming the bank's readiness to contribute to deepening economic ties and supporting companies and institutions in building new partnerships, fostering investment, and achieving further growth.
Signing the Joint Statement
GCC Secretary-General Jasem Albudaiwi, along with Britain’s Minister of State for Trade Chris Bryant, signed a joint statement in London last Wednesday to conclude negotiations on the free trade agreement between the two sides, following years of negotiations.
Albudaiwi described the agreement as a "qualitative leap" in GCC-British relations, affirming that it will contribute to strengthening economic pathways between the two regions for generations to come.
He added that the agreement was not a coincidence but the result of "years of work and shared political will" between the six GCC countries and the UK
London's Commitment
The British Foreign Office had stated earlier that the free trade agreement with GCC countries reflects London's commitment to a long-term partnership with Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain, and Oman, noting that it is the first free trade agreement concluded by the Council with a G7 nation.
According to British data, the current trade volume between Britain and GCC countries is approximately £52.9 billion ($72 billion), with expectations of a trade increase of about 20 percent, equivalent to £15.5 billion ($21 billion) annually.
The agreement will also contribute to facilitating GCC exports to the British market, supporting services and professional sectors, and simplifying visa procedures and business visits.
Britain's Trade Minister Peter Kyle stated that the agreement represents a significant step in the partnership between the UK and GCC countries, and will open new opportunities for trade, investment, and innovation.
Meanwhile, the UK Trade Commissioner for the Middle East and Pakistan, Sarah Mooney, affirmed that the agreement will reduce tariffs and boost exports for both sides, giving investors greater confidence to make long-term decisions.
