Britain clinches $5 billion Gulf trade deal in shadow of Iran war
The GCC deal follows US–Israeli strikes on Iran in February that triggered Iranian retaliation across the region, straining energy and food supplies
Britain said yesterday it had secured a trade deal with the Gulf Cooperation Council worth $5 billion a year in the long run, deepening economic ties with allies in a region dealing with the fallout from the Iran war.
The deal with the GCC, which consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, comes after US-Israeli strikes against Iran in February triggering Iranian attacks on other countries in the region, putting strain on energy and food supplies.
"At a time of increased instability, today's announcement sends a clear signal of confidence - giving UK exporters the certainty they need to plan ahead", Britain's Trade Minister Peter Kyle said.
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The British government said the deal would be worth £3.7 billion ($4.96 billion) each year in the long term, more than double a previous estimate that it would be worth £1.6 billion, as the final deal went further on both trade liberalisation and service sector commitments than previously expected.
The deal will remove 93% of GCC tariffs on British goods, equivalent to the removal of £580 million worth of tariffs by the deal's tenth year, with two-thirds of the tariffs being removed as soon as the deal comes into force.
The government said that autos, aerospace, electronics and food and drink would be among the sectors to benefit, with cereals, cheddar cheese, chocolate and butter all becoming tariff-free.
In return, Britain has lowered tariffs to the GCC, though the countries' main exports to Britain, oil and gas, are already tariff-free.
On services, Britain locked in current access to the GCC so businesses could expand without facing new barriers, while Gulf countries can also grow their own service sectors through the deal.
GCC Secretary-General Jasem Mohamed Albudaiwi said following the signing that the agreement had a framework designed to achieve "tangible and measurable" economic benefits for businesses, investors and citizens of the seven signatory countries, according to a statement by the GCC.
He said the agreement spans trade in goods and services, financial services, digital trade, investment protection, telecommunications and others.
The deal doesn't change or weaken British environmental or data protection standards, and also doesn't contain any language around human rights, the UK government said. Some campaigners had warned the British government against ignoring human rights in any deal with the GCC.
Tom Wills, director of the Trade Justice Movement said that "by failing to negotiate any enforceable human rights protections within the deal, the UK has taken a moral step backwards."
The agreement does contain an investor protection chapter to extend provisions to the three GCC states that weren't previously covered by such treaties and it includes Investor-State Dispute Settlement, a mechanism that Wills also criticised for allowing Gulf investors to sue the British government.
