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Britain has a golden opportunity to leapfrog the EU and secure a free trade deal with the Gulf States

Omar Bahlaiwa
SAUDI-RIYADH
Countries like Saudi Arabia are embracing fundamental economic reform (Source: Getty)

As Britain's departure from the European Union draws closer, concern over the country’s economic prosperity is mounting. It shouldn’t. Britain has long-standing allies in the Gulf who will work hard to negotiate a free trade agreement that benefits all.

The six Gulf states of Saudi Arabia, Kuwait, United Arab Emirates, Oman, Bahrain and Qatar are part of a political and economic bloc called the Gulf Cooperation Council, or GCC. In 2015, UK exports to the GCC stood at roughly £22bn, a figure that exceeds British exports to China and is more than double those to India.

A free trade agreement, hand in hand with a more open approach to international trade, could see this figure jump significantly. Dr Liam Fox, newly-created secretary of state for international trade, knows this and has already identified 31 “big-ticket” exporting opportunities in the GCC.

Speaking in Manchester, he said Britain has “a golden opportunity to forge a new role for ourselves in the world”.

Read more: Free trade can be our Berlin Wall moment

Timing is everything, and Britain’s post-Brexit campaign for greater international trade comes at a moment of equal change in the Gulf. The GCC states are currently undertaking the most drastic reforms in their histories to adjust to lower energy prices and to ultimately prepare for a post-oil era.

The most ambitious and far-reaching reform programme is the National Transformation Plan that has been initiated by Prince Mohammed bin Salman in the Kingdom of Saudi Arabia.

Prince Mohammed bin Salman
The most ambitious and far-reaching reform programme is the National Transformation Plan that has been initiated by Prince Mohammed bin Salman in the Kingdom of Saudi Arabia (Source: Getty)

At the heart of these reforms is a need to diversify economically, a process that will not be without hurdles and will require expertise to build new sectors and introduce greater enterprise.

Britain has deep expertise in many of the sectors that Gulf countries have targeted, such as tech, education, healthcare, infrastructure, defence and retail. British companies in these sectors should be looking very seriously at the GCC for growth.

What’s more, Britain has a competitive advantage over the long queue of nations jostling to win business from this once-in-a-lifetime opportunity: history.

Unlike other parts of the Arab world, Britain’s legacy is fondly remembered in the Gulf and the country is perceived as a long-term, reliable and loyal ally. Britain was at the forefront of the international campaign to liberate Kuwait from Saddam Hussein’s invasion in 1991, and fought alongside Gulf units.

Last year marked the hundredth anniversary of the Treaty of Darin, which was signed by Britain and Saudi Arabia and marked a critical moment in the modern Kingdom’s history.

Margaret Thatcher And Prince Fahd
Britain is perceived as a reliable and loyal ally by the Gulf States (Source: Getty)

Britain’s relationships with the Gulf are much deeper and broader than its Asian and European competitors. London is known as the capital of the Arab world and is a second home to millions of Gulf nationals.

A free trade agreement with the GCC would also send a message to Brussels, which has been unable to reach an agreement after more than 25 years of trying.

Britain would be joining the European Free Trade Association (EFTA) states – Iceland, Liechtenstein, Norway and Switzerland – which signed a free trade agreement with the GCC in 2009.

The result would be the UK leapfrogging the European Union and gaining an advantage over competitors such as Germany, France and Italy who have much to lose: the GCC is the EU’s fifth largest trading partner with €155bn in trade in 2015.

So what are the chances of successfully negotiating a free trade agreement? Issues such as visas and state subsidies would need to be worked through, but the political will is there.

Swiss flags
EFTA states like Switzerland already have a free trade deal with the GCC (Source: Getty)

On a recent visit to London, the Saudi foreign minister Adel Al-Jubeir told Parliamentarians that the GCC will pursue a free trade agreement in the near future.

Saudi Deputy Crown Prince Mohammed bin Salman had earlier raised the subject with Prime Minister Theresa May on the sidelines of the G20 summit in China.

The contours of the free trade agreement would not be created from scratch. In addition to the free trade agreement with the EFTA, the GCC has an agreement with Singapore which was reached in 2013.

Britain and the Gulf States find themselves today striving to build greater prosperity from global trade. They should not let this opportunity slip, and should approach negotiations with the confidence of knowing that a brighter future lies ahead.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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