The British government said on May 21 that it had reached a trade agreement with the Gulf Cooperation Council (GCC), with an estimated value of about 5 billion USD per year in the long term.
The agreement was signed with the GCC, an organization including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, taking place in the context that the Middle East is still affected by the war related to Iran after US-Israel airstrikes in February.
According to the British government, the agreement will bring in about £3.7 billion per year in the long term, equivalent to about USD 4.96 billion. This figure is much higher than the previous estimate of £1.6 billion, due to the final content of the agreement being broader than expected in terms of trade liberalization and commitments in the service sector.
British Trade Secretary Peter Kyle said the agreement is a signal of confidence in economic cooperation in the context of increasing global instability. He said this will help UK exporters gain more certainty in building long-term plans.
According to the announced terms, the GCC will eliminate 93% of the tax currently applied to British goods. The British government said that the amount of tax removed is equivalent to about 580 million British pounds in the 10th year of the agreement. This tax will be eliminated by about 2/3 as soon as the agreement takes effect.
Areas expected to benefit include automobiles, aerospace, electronics, food and beverages. Some products such as cereals, cheddar cheese, chocolate and butter will be completely tax-free.
In return, the UK also reduced taxes on goods from GCC countries. However, the key export items of the Gulf region to the UK are oil and gas, which have been tax-exempt before.
In the service sector, the UK maintains its current access to the GCC market so that businesses can expand operations without facing new barriers. Gulf countries are also expected to expand their service sectors through this agreement.
GCC Secretary-General Jasem Mohamed Albudaiwi said that the framework of the agreement aims to create "specific and measurable" economic benefits for businesses, investors and citizens of the seven signatory parties.
According to a statement from the GCC, the agreement covers many areas such as trade in goods, services, financial services, digital commerce, investment protection and telecommunications.
The British government affirms that the agreement does not change or weaken its environmental and data protection standards. The document also does not include content related to human rights.
