Diplomacy

The UK nearing £1.6 billion trade agreement with Gulf states

Published

on

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.

MOST READ

Exit mobile version