UAE, UK seek stronger investment and trade ties as free trade deal talks with GCC progress

The UK has recently been actively seeking cooperation with the Gulf Cooperation Council (GCC) region, holding significant consultations with the UAE, Saudi Arabia, and Qatar. These efforts aim to advance a free trade agreement with the region, fostering stronger economic ties.

Recently, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, met with The Rt Hon Bim Afolami MP, Economic Secretary to the Treasury of the United Kingdom.

Sheikh Maktoum stated on social media platform X: "Our discussions focused on accelerating investments, building sustainable financial frameworks, and promoting innovation in the financial sector. The UAE remains committed to strengthening its position as a strategic partner in the region. We will continue to facilitate private sector growth and unlock new avenues for economic cooperation."

During the meeting, Sheikh Maktoum emphasized the deep economic ties between the UAE and the UK, which are continuously evolving and expanding, reflecting both nations' shared vision for a vibrant and sustainable global economy. The UAE remains dedicated to fostering a strategic partnership with the UK to support long-term prosperity and innovation-driven growth.

Sheikh Maktoum added that the meeting underscored the importance of accelerating investment and trade, highlighting the UAE's position as the UK's largest trading partner in the Middle East. Discussions also covered enhanced cooperation to facilitate investment flows, promote sustainable finance frameworks, strengthen financial markets, and capitalize on growth opportunities in financial services and fintech.

The UAE and the UK's trade relationship continues to grow across various sectors, including investment, trade, health, energy, education, space, tourism, food security, and technology. Through bilateral platforms such as the UK-UAE Business Council, the Joint Working Group, and the Joint Economic Committee, both countries are identifying and leveraging shared opportunities for economic growth.

A recent report by the UK Department for Business and Trade revealed that bilateral trade between the two countries increased by 2% year-on-year in the third quarter of 2024, reaching £23.4 billion. Over the four quarters leading up to the end of Q3 2024, the UAE was the UK's 19th largest trading partner, accounting for 1.4% of total UK trade.

Furthermore, over 5,000 UK businesses operate in the UAE. In 2019, the UAE introduced new regulations allowing 100% foreign ownership in several sectors, including technology, outer space, renewable energy, and artificial intelligence. The UK is the largest source of foreign direct investment into the UAE, meaning this new regulation will benefit both the UK and the UAE.

Negotiations for a Free Trade Agreement (FTA) between the Gulf Cooperation Council (GCC) and the UK were launched on June 22, 2022. The agreement is expected to further strengthen bilateral relations and the strategic economic relationship between the UK and the GCC. Baroness Dido Harding, the UK Investment Minister, recently stated that negotiations are progressing rapidly, with both sides engaged in constructive discussions on goods, services, and sustainable trade provisions.

It is estimated that an agreement between the GCC and the UK could increase bilateral trade by 16%, adding $10.85 billion annually to trade between the UK and GCC member states in the long term. Currently, bilateral trade between the UK and the GCC is approximately $72.41 billion.

In an interview with Qatar News Agency (QNA), Harding stated that Qatar is an important market for the UK in terms of trade and investment due to its dynamic and diversified economy and the broad growth areas identified in its National Vision 2030. The two countries have a strong and thriving economic partnership, with total trade in goods and services reaching $7.06 billion in the first three quarters of 2024.

During a recent visit to Saudi Arabia, Harding noted the UK's genuine commitment to strengthening trade relations with Saudi Arabia. In 2023, bilateral trade between Saudi Arabia and the UK surged to $21 billion, and with a comprehensive free trade agreement between the UK and the GCC on the horizon, trade is expected to grow even further.