The importance of Free Trade Agreements
As the UK forges its new place in the world, business has the opportunity to shape the international business environment by informing the UK policy agenda.
The UK government’s ambition is to secure free trade agreements (FTAs) with countries covering 80% of UK trade by the end of 2022. The Department for International Trade (DIT) aims to secure an ambitious programme of FTAs to benefit the whole of the UK and support businesses of all sizes across different sectors of the economy.
FTAs promote trade and investment and help secure access for UK exporters to the markets. They can also lead to increased output and productivity, which boost living standards, and offers consumers lower prices and more choice. Ultimately, helping make the UK have a more competitive, dynamic and future-focused economy.
The benefits of a new FTA between the UK and Gulf region
Trade between the UK and GCC is currently worth £30 billion/year: a new trade deal would settle our relations to Gulf countries, and offer great opportunities for digital trade, services and green growth – similar industries across the UK and GCC.
The unique characteristics of both regions sets this FTA apart: the GCC countries are large importers of agricultural products – a potential new market for UK food producers; and whilst the GCC is looking to diversify from fossil fuels to ensure their economies are future-proof, the UK is at the forefront of the race to net zero, and able to provide GCC countries with expertise in renewable energy and sustainability.
Shaping the UK’s future relationship with the Gulf Cooperation Council (GCC)
With the benefits clear to see, in early 2022, the UK and GCC are planning a new FTA, seeking to strengthen existing trade relations, and boost investment between regions.
Business have a chance to have their say and shape this FTA and their negotiations. By sharing insight, your business can help reduce trade barriers between countries - highlighting areas that the government should prioritise or showcasing the current challenges and constraints when trading with a GCC country.
While the new FTA will require a trade deal with each individual nation, it will still need to adhere to the intra-GCC trading rules. Despite this, the UK’s Department for International Trade (DIT) is also exploring the option to make additional trade deals with each nation, outside of the free trade agreement with the GCC.
To help shape negotiations, DIT have launched a three-month consultation running until 14 January 2022. The CBI will be feeding into DIT’s consulting and is currently collating business insight on this new FTA so the UK can unlock successful opportunities in the future of trading in the Gulf.
The CBI is keen to get your views on:
- Which areas would you want the UK government to prioritise on trade talks with the GCC?
- Are you facing challenges or constraints when attempting to trade or invest in the GCC, and if so, how significant is this on your business activity?
- How do you expect your business to respond to a new FTA with the GCC? For example, might you begin exporting to, or importing from, the GCC? Or look to invest in the GCC or attract investment from the GCC, increase output or hire more workers?
- How do you expect your business to respond to the removal of tariffs with the GCC?
- Is your business trading products related to the environment and/or a low carbon economy with the GCC?
With the exciting possibility of this deal, the CBI wants you to have your say in the free trade agreement – here are the best chances of getting involved:
Dubai Expo 2022: Offering an exclusive opportunity to CBI members, the CBI is taking a UK business delegation, led by Lord Bilimoria, to the Dubai Expo in February 2022. We highly encourage you to take part in this unique chance to represent the UK and strengthen existing networks in the Gulf.
Consultation: the CBI is keen to hear your thoughts on the UK-GCC free trade agreement.
Get in touch with Hemi Bhatti for both opportunities, or any additional information.