Gulf Cooperation Council trade deal exciting for agri-food exporters
• The UK has launched negotiations with the Gulf Cooperation Council (GCC) for a Free Trade Agreement (FTA)
• The bloc covers £33 billion worth of total trade
• Food and drink sector will be among the biggest to benefit
• We welcome the focus on ‘green’ innovation as the GCC minimises its reliance on oil
The UK has launched negotiations for a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC). The GCC is a trade bloc that comprises of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, and covers £33 billion worth of trade in total. When considered a whole, the bloc is equivalent to the UK’s seventh largest export market.
The GCC has a growing demand for international products and services as it seeks to minimise its reliance on oil by moving towards more sustainable sectors. Its demand for international products is expected to grow by 35% by 2035.
One of the main industries set to benefit from this deal will be our food and drink sector. The GCC is heavily reliant on imported food, particularly grains and cereals. In fact, last year UK food and drink exports to the GCC were worth £625 million. However, the GCC currently imposes high tariffs on imported food products. For example cereals come with a 25% tariff, chocolate up to 15%, and baking products up to 12%.
Removing tariffs on exports to the GCC will therefore significantly benefit British farmers in that they will have access to a new market, where there is plenty of demand, and which promises strong growth.
It is encouraging that there is a focus on sustainable innovation within our partnership. As the GCC moves away from oil, the FTA presents an opportunity for the UK to support the trade bloc’s low-carbon growth by promoting our own environmental policies and innovations. It is a positive step towards cementing the UK’s role as a global leader in ‘green trade’, supporting the global race to Net Zero.
Our own data shows that around a quarter (26%) of IoD members who trade internationally already import from and/or export to the GCC. Anecdotally, members have told us they are particularly excited about the GCC FTA because of the opportunities the deal offers for agri-food businesses. It is positive to see that businesses, having grappled with a challenging trading relationship with the EU following Brexit, are planning for growth by seizing the advantages these agreements provide.
Click here for more information from the government on this deal.