The UK has approached the UAE and other Gulf countries about a trade pact following Britain’s exit from the EU, the UAE economy minister announced on Monday.
Speaking at the World Government Summit in Dubai, Sultan bin Saeed al-Mansouri said "such agreements can take years to negotiate".
Details on the outline of a potential deal were not given.
The UK is due to leave the EU on March 29, but it has yet to find an agreement that suits both Brussels and British lawmakers, raising the prospect of a crash exit that could pummel the UK economy.
A government spokesperson confirmed that UK International Trade Secretary Liam Fox attended the same World Government Summit in Dubai where he took part in "several days of high-level political and business discussions with UAE officials and businesses".
The Department for International Trade (DIT) spokesperson told Arabian Business: “The UAE is a vital global trading partner for the UK.
"The Prime Minister has been clear that she is looking for the strongest possible trading relationships between the UK and the Gulf after the UK leaves the EU.”
The spokesperson noted that the UK-GCC Trade Working Group was announced in December 2016 to examine how the two regions can best seek to deepen the trade relationship once the UK has left the EU.
This includes exploring non-tariff measures, such as regulatory barriers to market access, which could help facilitate free-flowing trade.
In 2017, trade between the UAE and UK totalled £17.5 billion, up 12.3 percent from 2016, according to official figures. By 2020, the UK government wants that number to increase to about £25 billion.
Commenting on a potential GCC-UK trade deal, M.R. Raghu, head of research, Kuwait Financial Centre said: “In all probability, the UK would be pushing hard for a free trade agreement (FTA) with the GCC regional bloc.”
The Kuwait-based economist noted that GCC-UK trade value stands at approximately $50 billion.
Raghu added: “An FTA between the EU and GCC region has been in discussion since 1998 but never materialised. The GCC might capitalise on the current opportunity for an FTA with UK.”
Raghu said the sectors that could pull in more bilateral trade include defence, financial services, construction healthcare, education and emerging areas, such as AI and life sciences.
Ian Begg, Professorial Research Fellow at London School of Economics and co-director of the Dahrendorf Forum European Institute. said ‘it’s not all surprising’ that Mr Fox has visited the Gulf to oil the wheels with ‘under the table’ discussions.
Begg said: “Legally the UK can’t sign trade deals yet until it is out of the EU, but they can have preliminary discussions.
“They [British government] will be looking at eliminating trade barriers wherever they can.”
Begg said the UK economy, like all economies, works best when trade is as free as possible. “If Britain leaves the EU with no deal this is the worst possible outcome for the country,” Begg said.
“It can take years to secure good trade deals. A no deal Brexit would most certainly mean slower growth and higher unemployment,” he said.
Britain’s catastrophic experience has highlighted the "difficult consequences" of the exiting the world’s largest trading bloc, the EU expert said.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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