Kemi Badenoch visits Gulf to boost trade ties
Business and Trade Secretary, Kemi Badenoch, visits the Middle East to advance the UK’s ambitions for a modern, comprehensive trade deal with the GCC.
- Business and Trade Secretary will visit Qatar, Saudi Arabia, and the United Arab Emirates on a five day tour this week.
- A deal with the Gulf Cooperation Council is expected to increase trade by 16% between the UK and the region.
- 2022 saw a significant boost in UK services exports to the region, including innovative British green firms expanding across the Gulf.
Business and Trade Secretary Kemi Badenoch will hold talks to encourage the Gulf Cooperation Council (GCC) Ministers to advance the UK’s ambitions for a modern, comprehensive trade deal as she visits Qatar, Saudi Arabia and the United Arab Emirates this week.
Meeting her ministerial counterparts in each nation, and new Secretary General of the GCC Jasem Al-Budaiwi, Badenoch will also speak with senior business leaders and investors to build on inward investment to the UK – currently worth more than £15.7 billion – delivering on the government priority to grow the economy.
Ahead of her visit, Business and Trade Secretary Kemi Badenoch said:
We already have a strong trade and investment relationship with the Gulf nations, but I’m determined to strengthen this even further.
The GCC represents an enormous opportunity for UK firms, whether it’s selling brilliant British food and drink products into new markets or offering new consumers for our flourishing digital trade and renewable energy sectors.
I know my counterparts are as ambitious for this deal as I am, and I’m ready to match their ambition.
The trip comes as the total trade between the UK and GCC reached a record high of £61.3 billion in 2022.
The UK began negotiations with the six-country bloc in 2022 and has completed three rounds of talks so far.
Collectively, the GCC is equivalent to the UK’s seventh largest export market. Their demand for goods and services is expected to grow rapidly to almost £1 trillion by 2035 – an increase of over 75%.
This will open huge, new opportunities for UK businesses, from food and drink to cars and clothes – removing these types of tariffs as part of a trade deal will help to increase choice for GCC consumers, giving them access to a greater range of UK products. This will help to create jobs across the country, support businesses to expand and grow the economy.
A deal with the GCC will also play to the UK’s strengths as a global services superpower. UK exports to GCC amounted to £36 billion, with more than half being services.
Pioneering green technology firms based across the UK are already taking advantage of the region’s pivot away from fossil fuels. Innovators including Levidian Nanosystems, Sonihull, Graphene Solutions and G-volution are boosting sustainability and clean energy and have expanded their operations to the Gulf as the region diversifies its economy.
Levidian Nanosystems CEO John Hartley said:
The GCC is an important region for Levidian – the combination of large-scale gas assets which require decarbonisation, heavy industry which can benefit from graphene application, and a political will to decarbonise at pace make it an area in which Levidian can have significant impact.
The Business and Trade Secretary will speak at the Qatar Economic Forum on Tuesday and take part in a series of business engagements throughout the week.
Background:
- UK firms have at least £13.4 billion invested in GCC economies and GCC firms have at least £15.7 billion invested in the UK as of 2020. These figures do not fully capture the size of the UK-GCC investment relationship due to data disclosures.
- As part of the terms, a GCC Free Trade Agreement can also include bespoke chapters with each individual nation. Round 3 of negotiations concluded in March and Round 4 will take place later this year.
- In 2022 food and drink exports to GCC markets totalled £877 million, an increase of more than 40% in current prices on the £625 million-worth in 2021. Some of the top exports include whisky, cereals and chocolate. The FTA will seek to remove non-tariff-barrier issues related to marking and labelling, making it easier for more UK food manufacturers to trade and comply with the local rules and regulations.
- The UK is the second largest services exporter in the world and top services exports to the GCC in 2022 were other business services (£4 billion), travel services (£2 billion), and financial services (£746 million). UK exports of services to GCC increased by 48% or £6 billion in current prices, in 2022 compared to 2021. Services trade makes up 67% of total exports to Saudi Arabia and is our 10th largest service export market in the world.
- All regions and nations of the UK are set to benefit from a trade deal with the GCC. Communities outside of London are expected to benefit most, with the East Midlands, West Midlands, North East and Yorkshire and the Humber in line for the greatest relative gains.