Officials are working on a new trade deal with the six members of the GCC, including the UAE and Saudi Arabia The British government is looking at a trade deal with Gulf states, International Trade Secretary Liz Truss has said, as ministers work on a £5 billion ($7.06bn) investment tie-up with the UAE.
Officials are drawing up an approach to the six members of the GCC, including Saudi Arabia and the UAE, after making the bloc a “definite target” for a trade deal, Ms Truss said.
She also called on G7 trade ministers to rally behind a push to overhaul the World Trade Organisation at a meeting on Thursday, warning the trade referee faces a “do or die moment”.The Department for International Trade is turning its attention to more ambitious relations with India and the GCC as it nears the end of “phase one” talks with Australia and New Zealand.
“The Gulf is a definite target and we are working on the approach to [the] Gulf,” Ms Truss said. “We are in discussions with the GCC and I hope that we’ll be able to say more about that soon.”
The GCC talks come as sources said Ms Truss and fellow minister Lord Grimstone are closing in on a deal with Abu Dhabi sovereign wealth fund Mubadala Investment Company. The agreement will open the door to as much as £5bn of investment into the UK from the Middle East. The chief executive of Mubadala, Khaldoon Al Mubarak, is understood to have been in London for talks over the investment. The source said the deal was “getting some real traction now” after a “couple of very big meetings recently”.
British trade with GCC members was worth £45bn in 2019, the fourth largest amount after the EU, US and China. The door to a GCC deal was opened last November by the launch of a joint review into economic ties, which will conclude next month. Mubadala is said to be aiming for investment in health, clean energy, infrastructure and technology in what would be a major boost to Prime Minister Boris Johnson’s post-Brexit ambitions. Of all the deals being targeted by Ms Truss’s department, a free-trade agreement with Australia was supposed to be the easiest to seal.
But the generous tariff-free, quota-free tie-up offered to Canberra divided the Cabinet last week over fears it would hit British farmers. Ms Truss and the ardent free traders won out over colleagues’ protectionist instincts. “The deal we strike with Australia will not set a precedent for any other deal,” she said. “It is a bespoke deal with a very close partner.
“From my previous negotiations with Canada, they have been quite protectionist in some areas, namely in dairy.” Australia is set to be the UK’s first tailor-made post-Brexit trade deal after rolling over a number of EU agreements. The milestone deal could be wrapped up by the G7 summit in Cornwall next month, and officials expect an agreement with New Zealand to quickly follow on similar terms. Canada talks will also begin soon but could be more fraught, with Ottawa confirming today they plan to make inroads into UK agriculture.
With the relatively low-hanging fruit in train, Ms Truss’ attention is starting to turn to the more ambitious and potentially more lucrative “phase two” of Britain’s trade strategy as an independent power. “We’ve made significant inroads into the phase two and we are now bringing forward new opportunities,” she said. “India, of course, is a massive priority for the UK. We are in discussions with the Gulf Co-operation Council and I hope that we’ll be able to say more about that soon.” Beyond the packed pipeline of deals in the works, Ms Truss said that exploratory discussions with other as-yet unannounced countries have begun as the first phase begins to deliver results.
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