The trade deal will remove an estimated 580 million pounds in duties a year, based on current UK exports to the GCC, said the Department for Business and Trade
Amid the ongoing Iran war, that has been hammering the British economy through fallouts like supply chain disruption and energy price hike, the Keir Starmer administration pulled off the much-anticipated trade deal with the Gulf Cooperation Council (GCC), becoming the first-ever Group of Seven (G7) nation to enter into a commerce pact with the Middle East’s most powerful nations.
The trade deal comes with the potential of boosting the United Kingdom’s economy by an estimated 3.7 billion pounds (USD 4.9 billion) every year, apart from increasing wages by 1.9 billion pounds in the British mainland (on an annual basis) in the long run, said the UK’s Department for Business and Trade (DBT), while announcing the agreement.
“The UK could see a boost to growth and higher wages for decades to come after becoming the first G7 country to secure a trade deal with the Gulf Cooperation Council (GCC) today — strengthening our economic partnership with the region, supporting jobs in the long term, and bolstering domestic resilience. The deal with the GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, reflected the UK’s solidarity and long-term cooperation with its Gulf partners,” the DBT said.
“The deal will remove an estimated 580 million pounds in duties a year, based on current UK exports to the GCC, once the agreement is fully implemented, with 360 million pounds of this amount ‘to be removed on day one of the agreement entering into force’,” it stated further.
British exports of cereals, cheddar cheese, chocolate and butter will likely become tariff-free under the terms of the deal. The deal was the fifth in the line for the former European Union (EU) member, following similar arrangements with India, the United States, the EU and South Korea.
Sectors like automobile, aerospace, electronics and food and drink will get benefits too. In return, the European country has lowered tariffs on the GCC’s main exports to Britain. It is worth mentioning that the import of energy products is already tariff-free.
The deal will also serve as a breather for Starmer, who is currently facing challenges in terms of dealing with the fallout of the Iran war, with terms like “stagflation” and “recession risk” dominating the discourse among the analysts.
“At a time of increased instability, the announcement sends a clear signal of confidence – giving UK exporters the certainty they need to plan ahead,” Britain’s Trade Minister Peter Kyle said.
On the services front, the trade deal will ensure that Gulf businesses could expand in the United Kingdom without facing new barriers.
