UK signs $5 billion trade deal with Gulf countries amid war in Iran

United Kingdom flags in front of Big Ben, in a photo from June 2022
AP Photo/Frank Augstein
The United Kingdom government stated this Wednesday (20) that it had closed a trade agreement with the Gulf Cooperation Council (GCC), with an estimated value of around US$5 billion (R$25.2 billion) per year in the long term.
The expectation is that the treaty will deepen London's economic ties with allies in the region. The GCC is made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
The agreement comes after attacks by the United States and Israel against Iran in February, which increased tensions in the region and put pressure on energy and food supplies.
"At a time of increasing instability, today's announcement sends a clear signal of confidence, giving UK exporters the certainty they need to plan for the future," said British trade minister Peter Kyle.
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The British government said the agreement surpassed the previous estimate of 1.6 billion pounds (US$2.1 billion or R$10.8 billion). The increase came after the treaty went beyond expectations in terms of trade liberalization and commitments to the services sector.
The agreement will eliminate 93% of GCC tariffs on British goods - the equivalent of around £580 million ($777 million) in duties over 10 years. The expectation is that two-thirds of these tariffs will be removed once the agreement comes into force.
The government has said that the automotive, aerospace, electronics and food and drink sectors should be among the most benefiting, with products such as cereals, cheddar cheese, chocolate and butter exempt from tariffs.
In return, the United Kingdom has reduced tariffs for Gulf Cooperation Council countries, although the main exports of these partners - oil and gas - are already exempt.
In the area of services, the The United Kingdom maintained the current CCG market access rules, allowing companies to continue expanding without new barriers. Gulf countries will also be able to develop their own sectors under the agreement.
The agreement does not alter or weaken British environmental or data protection standards and does not include mention of human rights, according to the government. Activists had warned of risks in this area.
Tom Wills, director of the Trade Justice Movement, stated that "by not including human rights protections in the agreement, the United Kingdom has taken a moral step backwards."
The agreement includes investor protection rules that also apply to three GCC countries that were previously not covered. Furthermore, it provides for a mechanism that allows investors to sue the British government in court - a point criticized by experts.
*With report from the news agency Reuters.
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Source: G1