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The UK nearing £1.6 billion trade agreement with Gulf states

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The United Kingdom is on the verge of signing a £1.6 billion trade deal with Gulf states.

This agreement with the Gulf Cooperation Council (GCC)—comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—will mark Prime Minister Keir Starmer’s fourth major trade pact, following accords with the US, India, and the EU.

The UK government has announced its hope that the agreement will contribute an additional £8.6 billion annually to trade with GCC countries by 2035. Sources close to the negotiations in the oil-rich region stated that the deal is currently in its final stages, with an expectation that the UK will approve it shortly.

The deal appears particularly advantageous for the automotive industry and financial services. However, projections indicate the free trade agreement will likely contribute less than 0.1% to GDP over the next decade.

Nevertheless, a backlash is anticipated concerning a chicken import component of the deal, which could significantly harm British farmers due to potentially lower animal welfare standards in imported products.

According to information obtained by The Guardian, the Trades Union Congress (TUC) is among those urging caution regarding the agreement and has communicated its concerns to ministers.

Human rights organizations have previously contended that the UK should not enter into the free trade agreement without legally binding commitments to enhance human rights, particularly for migrant workers. They have emphasized that both the UK and the GCC should integrate robust human rights clauses into all future agreements, and that the UK government should transparently present an independent impact assessment on the potential consequences of deepening trade relations.

Another source familiar with the negotiations suggested that while some language addressing human rights is likely to be included as part of the commitments, there will be no legal obligation.

A spokesperson for the Department for Business and Trade confirmed that negotiations for a trade deal with the GCC are ongoing, with no deadline set. Ministry sources noted the possibility of a pause in negotiations due to Eid al-Adha, which commences on June 6.

The UK-GCC trade agreement will also affect the UK’s net-zero emission targets, as all six GCC nations rank among the top 10 globally for per capita carbon emissions.

TUC General Secretary Paul Nowak remarked, “The TUC has directly conveyed its concerns to ministers about the trade deal with Gulf countries, and we will continue to do so. Our view on trade deals is consistent: the government should not make deals with countries that violate human rights and workers’ rights and flout international law. It was the right decision for the government to suspend trade talks with Israel.”

Ministers are also expected to face opposition from the National Farmers’ Union concerning the agricultural aspects of the agreement. Industry representatives informed The Guardian that the deal might grant unrestricted access for chicken imports, provided they meet hygiene standards.

Trade Secretary Douglas Alexander is leading the negotiations and is reportedly prepared to finalize the work initiated by the Conservative government. This deal is viewed as a more concrete prospect than the agreement with India, which was signed two weeks prior. Alexander is anticipated to meet with his counterpart for final approval.

Former Trade Secretary Anne-Marie Trevelyan had previously assured Parliament that the deal “would not come at the expense of human rights.”

Members of Parliament had noted precedents for including rights issues in trade agreements, citing the New Zealand deal, which features a chapter with commitments ensuring indigenous peoples play a role in their country’s future development.

Nick Thomas-Symonds, who was the shadow trade secretary at the time, stated while in opposition, “It is crucial that human rights, women’s rights, and workers’ rights are incorporated into the UK’s trade negotiations.”

However, during recent discussions under the Labour government, House of Lords Trade Minister Baroness Jones asserted that while the UK is a “leading advocate for human rights globally,” this advocacy is pursued separately from free trade agreement negotiations. Speaking in the House of Lords last year, she commented, “While some aspects of trade policy can provide opportunities to address other issues in bilateral relationships, free trade agreements are generally not the most effective or targeted tool for advancing human rights issues.”

UAE Trade Minister Dr. Thani bin Ahmed al-Zeyoudi told Politico in 2023 that if the UK and other Western countries “want more market access and more business opportunities,” they should “soften” standard human and worker rights provisions in trade deals.

Government estimates indicate that trade with this bloc, the UK’s seventh-largest export market, is valued at approximately £59 billion annually. The trade agreement is projected to increase this trade by about 16%.

Sovereign wealth funds in Gulf countries, including Saudi Arabia and the UAE, are among the largest foreign investors in the United Kingdom.

Diplomacy

Armenia signals potential complete withdrawal from CSTO

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Armenian Deputy Foreign Minister Vahan Kostanyan announced that Yerevan might decide to withdraw entirely from the Collective Security Treaty Organization (CSTO) if member states fail to “demonstrate a clear political stance” regarding Azerbaijan’s actions. Kostanyan emphasized that Armenia is no longer making insinuations but is speaking very openly.

According to the Novosti-Armenia news agency, Kostanyan stated, “Ultimately, if our partners in the CSTO, including the Russian Federation, do not make the political statements that were mentioned several years ago after the aggression against the sovereign territory of the Republic of Armenia, then Armenia will make a final decision.”

The Deputy Minister also underscored that Armenia, as a sovereign state, will determine the right time for its next steps.

Membership was frozen

Relations between Armenia, Russia, and the CSTO deteriorated following the conflicts in Nagorno-Karabakh, after which Yerevan formally requested support from its allies.

Following this process, Prime Minister Nikol Pashinyan repeatedly criticized the CSTO for not assisting Yerevan.

Pashinyan described the organization as a “bubble alliance,” claiming it was “planning a war” against Armenia alongside Baku.

Last February, Prime Minister Pashinyan announced that Armenia had frozen its participation in the CSTO. By May, the Armenian Ministry of Foreign Affairs reported that the country would refuse to finance the organization’s activities.

Intelligence report points in the same direction

In January of this year, a public report released by the Armenian Foreign Intelligence Service stated that the country has no intention of returning to full participation in the CSTO in the near future.

The report noted, “We find it highly unlikely that the reasons that led to Armenia suspending its membership will change in 2025. Based on this situation, the organization’s prestige continues to be seriously questioned and has become a ’cause for reflection’ for other member countries.”

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BRICS internal trade volume hits the $1 trillion mark

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Kirill Dmitriev, Special Representative of the President of the Russian Federation and CEO of the Russian Direct Investment Fund (RDIF), announced that the internal trade volume among BRICS countries has reached $1 trillion.

In a statement on his Telegram channel, Dmitriev noted that surpassing this significant milestone confirms the strengthening of economic ties between member states and the bloc’s growing role in shaping the new global economic architecture.

He also emphasized that Russia continues to strengthen trade relations, particularly through the BRICS Business Council, in line with the directives of President Vladimir Putin.

BRICS’ share will continue to grow, Putin says

During a plenary session at the St. Petersburg International Economic Forum on June 20, Russian President Vladimir Putin recalled that at the beginning of the 21st century, BRICS countries accounted for only one-fifth of the global economy, whereas today this figure has reached 40%.

The Russian leader stated that this share will continue to grow, describing it as a “medical fact.” According to Putin, this growth will primarily be driven by the countries of the Global South.

In April, Maxim Oreshkin, Deputy Chief of Staff of the Presidential Administration of Russia, also said that the BRICS countries, operating on principles of consensus, have become a key force in the world economy.

BRICS expansion agenda

Initially composed of five countries—Brazil, Russia, India, China, and South Africa—BRICS expanded in 2024 with the inclusion of the United Arab Emirates (UAE), Iran, Ethiopia, and Egypt.

In January of this year, Indonesia became the bloc’s tenth full member.

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Xi Jinping to miss BRICS summit in Rio for the first time

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Chinese President Xi Jinping will not attend the upcoming BRICS summit in Rio de Janeiro next week.

According to multiple sources cited by the South China Morning Post on Tuesday, this marks the first time Xi will miss the gathering of leaders from major emerging economies.

Officials familiar with the matter stated that Beijing informed the Brazilian government of a scheduling conflict. Premier Li Qiang is expected to lead the Chinese delegation in Xi’s place, a similar arrangement to the 2023 G20 summit in India.

Chinese officials involved in the preparations suggested Xi’s absence is due to his two meetings with Brazilian President Luiz Inácio Lula da Silva within the past year. The first occurred during the G20 summit and a state visit to Brasília last November, while the second took place at the China-CELAC forum in Beijing this May.

Xi has never before missed a BRICS summit. In 2023, he was scheduled to deliver a speech at the meeting in South Africa but, at the last minute, sent Commerce Minister Wang Wentao instead. Beijing provided no official explanation for the change.

During the COVID-19 pandemic, Xi participated in BRICS meetings virtually, with Russia hosting in 2020 and China in 2021.

On Tuesday, the Brazilian Foreign Ministry told the Post it “would not comment on the internal deliberations of foreign delegations.” The Chinese embassy in Brazil did not immediately respond to requests for comment.

However, Chinese Foreign Ministry spokesman Guo Jiakun told the Brazilian newspaper Folha de S.Paulo, “information regarding participation in the summit will be shared at the appropriate time.” Guo added that China supports Brazil’s BRICS presidency and aims to “promote deeper cooperation” among member nations. “In a volatile and turbulent world, the BRICS countries are maintaining their strategic resolve and working together for global peace, stability, and development,” he said.

In Brasília, officials have not concealed their disappointment regarding Xi’s absence. A source informed the Post that Lula had traveled to Beijing in May as a “show of goodwill” and had hoped “the Chinese president would reciprocate the gesture by attending the Rio summit.”

There was also speculation that Lula’s invitation to Indian Prime Minister Narendra Modi for a state dinner after the BRICS summit may have influenced Beijing’s decision, as Xi might have been “perceived as a supporting actor” at the event.

Lula’s special adviser for international relations, Celso Amorim, met with Chinese Foreign Minister Wang Yi in Beijing, where he clearly expressed Brazil’s desire to host Xi. “I told them, ‘BRICS without China is not BRICS,'” Amorim stated, recalling that then-President Hu Jintao attended the first BRICS summit in Brazil despite a major earthquake in China at the time. “He only stayed for one day, but he came.”

Amorim emphasized the particular importance of Xi’s attendance in the current global context, citing the “US withdrawal from the Paris Agreement and the World Health Organization” as a “violation of international rules.”

Premier Li is expected to arrive in Brazil next weekend for the summit, which is scheduled for July 6 and 7 in Rio.

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