Following the Department for International Trade (DIT) consultation on a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC), the CBI shared your insight on what should be delivered for UK businesses in the upcoming UK-GCC free trade negotiations.
Top five priorities for UK businesses
1) Protecting the strong UK-GCC relationship and create further business confidence
The UK and the GCC have strong trading relations – currently at over £30 billion/year, with the GCC as the third largest export destination of the United Kingdom. To help protect this relationship and boost business confidence, key market barriers should be removed, with regulatory harmonisation at a regional level to ensure the Gulf and British standards are safeguarded.
2) Enabling UK businesses to benefit from diversifying markets
This is an opportunity for UK renewables and green services providers, as markets become more open and require the right expertise to help diversify into alternative revenue streams. For example, the UK leads in GreenTech and can offer expert services to the Gulf states to transition to low carbon energy. The GCC states also see UK as prime for investing in green energy, services, and electric vehicles – attracting such investment can contribute to the Levelling Up agenda.
3) Achieving tariff-free trade and flexible rules of origin to support British exporters
Domestic production is low within the Gulf. With 27 million native citizens and 29 million expats living in the region, there is great dependency on imports from British companies. Given that GCC states have limited capability to manufacture domestically, there is real appetite for British products – British agriculture and luxury goods brands see this as an opportunity, especially if the new FTA introduces tariff-free trade and flexible rules of origin.
4) Laying the groundwork for future collaboration on digital and innovation
This would match the ambition set out by GCC states who are looking to establish themselves as digital hubs and attract Foreign Direct Investment (FDI), as highlighted in the ‘Vision 2030’ strategy set out by UAE, Saudi Arabia and Qatar. By eliminating data localisation requirements whilst protecting consumer data and shifting GCC towards standardising compliance and security requirements through a regulatory dialogue will instil confidence in UK businesses to trade in the GCC. To further boost confidence adequate Intellectual Property (IP) protections should also be in place.
5) Removing trade barriers for UK businesses created by lack of regulatory cohesion amongst GCC states
Complex regulatory and legal frameworks with a lack of national and regional alignment, ranging from customs procedures to licensing, makes it difficult for businesses to operate in the markets. This is even more challenging for smaller companies who may not be able to bear the costs associated with the regulatory inconsistencies. Additionally, for those who do not have the established networks and insider knowledge can find it particularly difficult to navigate regulatory complexities of the Gulf states.
What’s next?
Following our submission going into DIT, the CBI will continue to collect feedback to take your views to the forefront of the upcoming UK-GCC free trade negotiations.
Prior to negotiations starting, CBI President, Lord Bilimoria and International Director, Andy Burwell are attending the Dubai Expo in February 2022 to represent UK and strengthen existing networks in the Gulf.
The negotiations will be held in April/May 2022 – and we need your member insight.
Speak to Hemita for further information or any questions on the UK-GCC FTA.