As part of plans to expand and diversify its global trade partners and fulfil their respective national development strategies, the GCC has launched negotiations with the UK on a free trade agreement (FTA). This partnership is expected to bolster the bloc’s economy, help attract investment and provide greater opportunities for local businesses.

On June 22, 2022 the two parties signed a joint statement and officially launched talks on a comprehensive trade deal, with Anne-Marie Trevelyan, then the UK trade secretary, meeting with Nayef Falah Al Hajraf, the GCC secretary-general, in Riyadh. Trevelyan then travelled to Dubai to meet with representatives from the six GCC countries: Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE.


The talks, which followed months of exploratory discussions, are focused on securing an FTA that would reduce or remove tariffs on a series of goods and services. In 2021 annual trade between the GCC and the UK stood at around $40bn. The FTA is expected to be a substantial economic opportunity for the UK-GCC relationship. GCC member states are important partners for the UK, and the bloc as a whole is equivalent to the UK’s seventh-largest export market, and the fourth-largest outside of the EU. The GCC’s demand for imported products and services is expected to grow rapidly to £800bn by 2035 – a 35% increase from 2022, creating new businesses and employment opportunities.

While there is no official timeline for the completion of the deal, in July 2022 local and international media reported that both sides are hopeful of securing an agreement before the end of 2023. The first round of negotiations, which were conducted virtually, took place between August and September 2022. In this round of deliberations, the UK and GCC discussed their objectives for the FTA and exchanged technical information. Technical discussions were held across 29 policy areas over 33 sessions. More than 100 individuals from UK and GCC government agencies participated in the talks.

Energising Renewables

One area where the deal is expected to have a significant impact is renewable energy. While the GCC’s oil and gas reserves are not likely to be included in the deal, any prospective agreement is expected to help Gulf countries diversify their respective energy sectors and reduce their reliance on hydrocarbons.

Talks are set to look at removing tariffs on renewable energy infrastructure such as UK-made wind turbine parts, and GCC countries would also benefit from greater access to UK clean energy technology, such as innovations that improve energy efficiency in homes, buildings and businesses. In a move to meet this goal, in late July 2022 Omani authorities hosted a conference in London highlighting the various renewable energy and decarbonisation investment opportunities in the country.

Organised by the Ministry of Commerce, Industry and Investment Promotion in partnership with the Oman Investment Authority and other stakeholders, the New Energy in Oman event featured a series of speakers from Oman and the UK and aimed to provide a forum for bilateral meetings with UK companies operating in the sector. Like many Gulf countries, Oman has set ambitious renewable energy targets, with the country aiming to generate 30% of its electricity from renewable sources by 2030.

The event built on recent developments between the GCC and the UK in the energy sector. In January 2022 Oman and UK energy major BP signed two deals to support the construction of renewable energy and green hydrogen projects in the sultanate. During bilateral talks in March 2022 then-UK Prime Minister Boris Johnson urged Saudi Arabia to increase oil production after pledging to phase out imports of Russian oil by the end of 2022. This action underscored the region’s key role in global energy security.

Bolstering Food Security

Free trade talks are expected to yield progress on agricultural imports and food security. Individuals involved in the discussions have flagged the possibility of the GCC reducing or removing tariffs on food and drink imports from the UK, which range from 5% to 25% for various products. In addition to supporting UK farmers, such a deal would help shore up food security in the GCC.

Following the disruption of global supply chains associated with the Covid-19 pandemic and, more recently, Russia’s invasion of Ukraine in February 2022, food security has become a more pertinent issue for governments in the GCC, which has some of the world’s most import-dependent countries. At the beginning of the pandemic countries in the bloc imported around 85% of their food. Almost all rice consumed in the region was imported, as well as some 93% of cereals, approximately 62% of meat and 56% of vegetables. In April 2020 the GCC accepted a Kuwaiti proposal triggered by concerns about pandemic-related disruptions in trade to set up special arrangements at border control and Customs posts, facilitating the movement of basic food and medical supplies within the alliance. While GCC countries have reacted to recent events by increasing investment in agri-tech and improving efforts to bolster agricultural self-sufficiency, any agreement making it easier to import food and drink products from outside the GCC could further benefit the bloc’s food security.

GCC Trade Footprint

The launch of free trade talks is a significant step for the GCC as it seeks to diversify its trade partners and strengthen its position in global trade. In addition to existing free trade deals with New Zealand, Singapore and the European Free Trade Association countries of Iceland, Liechtenstein, Norway and Switzerland, the GCC is in trade negotiations with the EU, Japan, China, South Korea, Australia, Pakistan, India, Turkey and the Southern Common Market member countries of South America. These agreements are expected to play an essential role in attracting foreign investment to the region, as GCC countries embark on transformation strategies to diversify their economies.

For example, as part of the country’s long-term economic plans, Saudi Arabia has launched a series of mega-projects that are designed to stimulate economic activity in non-oil sectors, including the $500bn NEOM smart city; the $8bn Qiddiya entertainment city outside Riyadh; and the Red Sea Project, a 34,000-sq-km luxury tourism development.

Strengthening Bilateral Ties

The launch of trade talks is the culmination of efforts to bolster cooperation between GCC countries and the UK. In January 2022 Oman and the UK signed an agreement to strengthen their already close economic ties. UK companies have a long history of investment in Oman, accounting for around 50% of foreign investment in the country in recent years, according to Oman’s National Centre for Statistics and Information.

“The UK-GCC free trade agreement will deepen the historic business ties we already enjoy with the UK, unlocking significant opportunities for the sultanate’s ambitious business community. It will help enhance our competitive position in the UK market, as well as boost growth across goods, services and investment,” Qais Al Yousef, Oman’s minister of commerce, industry and investment promotion, told OBG.

“It will also present opportunities in renewable energy, manufacturing, logistics, tourism, mining, fisheries and education – sectors which are important to the success of Oman Vision 2040 and areas where the UK is a global leader. Indeed, it has the potential to create sustainable, green jobs from Dover to Dhofar. It is an agreement that, when enacted, will be good for Omani workers, businesses and families. A milestone in bilateral relations.”

In March 2022 Saudi Arabia and the UK signed a memorandum of understanding to form a strategic partnership council to bolster bilateral investment and cooperation. With $13.2bn in bilateral trade in 2021 – an increase of 3.9% from 2020 – Saudi Arabia is the UK’s largest trading partner in the GCC, accounting for one-third of its business with the bloc.

In May 2022 it was announced that Qatar would invest $12bn in the UK economy between 2022 and 2027 as part of a new strategic investment partnership. The deal, which builds on the estimated £40bn in existing Qatari investment in the country, will focus on sectors such as financial technology, zero-emissions vehicles, life sciences and cybersecurity.

The agreement is similar to a deal that was struck between the UK and the UAE. Signed in March 2021, the UAE-UK Sovereign Investment Partnership will see Mubadala Investment Company, Abu Dhabi’s private investment vehicle, invest £800m in UK life sciences between 2022 and 2027. The partnership significantly expanded in September 2021, with Mubadala committing to invest an additional £10bn in technology and innovation-led sectors such as infrastructure development and energy transition.