UK agrees Gulf trade deal expected to add £3.7 billion to economy each year
The UK has agreed a new trade deal with the Gulf Cooperation Council that ministers say could add billions to the economy and make it easier for British businesses to trade across the Middle East. The agreement makes the UK the first G7 country to secure a trade deal with the GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The government says the deal could add around £3.7 billion to the UK economy each year in the long run while increasing wages by an estimated £1.9 billion annually.
Tariffs on a range of British exports including food products, medical equipment, and advanced manufacturing goods are expected to be removed once the agreement comes into force.
Products including cheddar cheese, cereals, chocolate, and butter are among the British exports expected to become tariff-free under the agreement as the Gulf region continues to import large amounts of food from overseas. The government says around £580 million in duties on UK exports will eventually be removed under the deal, including £360 million eliminated from the first day it takes effect.
British manufacturers, retailers and exporters are also expected to benefit from simpler customs procedures and stronger intellectual property protections. The UK automotive industry and retailers including Holland & Barrett were highlighted among the sectors likely to benefit.
Services firms are another major focus of the agreement. Services account for around 80% of the UK economy and roughly half of British exports to GCC countries.
In 2024, more than 400,000 business visits were made from the UK to the Middle East. Under the agreement, British professionals including lawyers, consultants, and engineers are expected to face fewer barriers when travelling for work across the Gulf region.
The deal also includes commitments designed to speed up customs processing. According to the government, goods should clear within 48 hours while perishable shipments could be released in under six hours once all requirements are completed.
UK companies will also be allowed to store and process data outside the Gulf region for the first time under a GCC trade agreement. Ministers say this could reduce costs for British businesses operating in the region.
The agreement follows a series of international trade deals involving India, the United States, the European Union, and South Korea as the government continues efforts to expand export opportunities for UK businesses. The government says the deal also supports industries including advanced manufacturing, clean energy and digital technology.
An official overview of the agreement is available through the UK Department for Business and Trade.
The government has recently intervened in the British Steel plant as ministers faced growing pressure over the future of strategic UK industries. Debate has also continued around the impact of US tariffs affecting UK car exports.
How do you think the Gulf trade deal could affect British industries and exports over the next decade? Read more UK business and politics coverage at EyeOnLondon
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