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Tuesday, September 06, 2022

Arabian Business - No brake on UK-GCC free trade negotiations as new PM Liz Truss takes office: Experts

By Century Financial in Century in News

Arabian Business - No brake on UK-GCC free...
Arun Leslie John, Special to Arabian Business September 06, 2022

The ongoing free trade talks between the Arabian Gulf and the UK are expected to continue – even potentially accelerated – as new Prime Minister Liz Truss navigates domestic economic woes post-Brexit, experts have suggested.

Truss, who won the premiership and became the new Conservative Party leader on Monday, oversaw the start of the trade talks between the Gulf Cooperation Council (GCC) and the UK.

This points to optimistic signs of where the new PM could take the UK-Gulf relations, experts told Arabian Business.

“The starting point must be to recognise that the cornerstone of UK foreign policy with the GCC is stability,” Sachin Kerur, head of the Middle East unit of international law firm Reed Smith, said.

“In a post-Brexit and Covid world, the UK is embarking on an internationalist agenda across a range of policies and sectors, by all accounts that will not be rolled back under the new Truss administration,” he added.

In 2021, total trade between the UK and the GCC amounted to $40.35 billion. Truss, who previously served as Britain’s international trade minister and foreign secretary, has been an ardent supporter of an even stronger bilateral cooperation.

“Indeed, the GCC’s economy is currently in a medium-term growth pattern and will be eager for the best of British enterprise,” Kerur said, adding “there are no suggestions yet of a brake on the free trade negotiations” between London and the Gulf.

The 47-year-old British politician is inheriting an array of domestic woes from scandal-plagued Boris Johnson – including a severe cost of living crisis and a potential recession.

This, according to Scott Livermore, the chief economist of Oxford Economics, would be Truss’ obvious priority as she embarks on the herculean task of addressing Britain’s immediate problems.

A loyal Boris supporter herself, Truss said she is keen to unlock the economic opportunities of Brexit.

“While this may lead to conflict with EU, it will also mean the UK government continues to pursue opportunities elsewhere, including with the Gulf,” Livermore told Arabian Business.

Truss had identified the Gulf to be an important economic partner post-Brexit. Just in December last year, the then foreign secretary hosted GCC leaders to further lock down areas of cooperation.

“I want us to have much deeper links in key areas like trade, investment, development and cybersecurity with a part of the world that is important to Britain’s long-term interests,” she said at the time.

She added closer security and economic ties with the Gulf “will deliver jobs and opportunities for the British people and help make us all safer.”

The UK also has ongoing free trade talks with Canada, Mexico, and India to replace deals it had to abandon after it left European Union’s trading circle.

A chief market analyst at Dubai-based Century Financial said securing a free trade agreement with the Gulf could be crucial to UK’s aim to diversify its trading partners, especially as it aims to tap the Indo-Pacific region.

“The key to guiding the British economy to a brighter future and strengthening the UK’s position in the Indo-Pacific markets is completing the free trade agreement with GCC members,” Arun Leslie John, said.

He explained the Gulf region serves as a vital channel to the massive Asian market, “which is home to some of the world’s fastest-growing economies and accounts for more than 40 percent of global gross domestic product.”

“Liz Truss is committed to delivering a bold plan to grow Britain’s economy; the successful execution of this free trade agreement will indeed feature as a milestone in her journey as the PM,” John said.

Arabian Business