Britain has become the first G7 nation to secure a major trade agreement with the Gulf Cooperation Council (GCC), in a move the Government says could deliver billions of pounds in economic growth and higher wages for UK workers.
The landmark agreement with Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates is expected to strengthen long-term economic ties between the UK and the Gulf region, while opening up new opportunities for exporters, investors and service industries.
Government figures suggest the deal could add an estimated £3.7 billion to the UK economy each year in the long run, alongside a £1.9 billion annual increase in wages compared with forecasts for 2040. Ministers also believe bilateral trade between the UK and GCC countries could rise by almost 20 per cent.
The agreement will remove an estimated £580 million in export duties each year once fully implemented, including £360 million worth of tariffs that will be eliminated immediately when the deal comes into force. British exports including cereals, cheddar cheese, butter, biscuits and chocolate are among the products set to become tariff-free.
Prime Minister Keir Starmer hailed the agreement as “a huge win for British business” and said working people would benefit from “higher wages and more opportunities” in the years ahead.
He said the Government had now secured five major trade agreements with international partners, following recent deals with India, the United States, the European Union and South Korea.
Business and Trade Secretary Peter Kyle described the deal as “modern and ambitious”, adding that it would give exporters greater certainty during a period of global economic instability.
Chancellor Rachel Reeves said the agreement would help deliver “growth, security and jobs” while supporting British firms to compete internationally.
The Government said the deal includes the most ambitious customs commitments ever agreed by the GCC, with goods expected to clear customs within 48 hours and perishable shipments released within six hours once all requirements are met.
Ministers also highlighted new digital trade provisions, allowing UK firms to store and process data outside the Gulf region for the first time. The measure is expected to reduce costs for businesses by removing the need for expensive local data centres.
The UK services sector, which makes up around 80 per cent of the British economy and more than half of UK exports to GCC nations, is also expected to benefit significantly. Lawyers, engineers, consultants and other professionals are set to gain easier access to Gulf markets through streamlined visa and mobility arrangements.
Retailer Holland & Barrett welcomed the agreement, saying it would support its international expansion plans in the Gulf region. Meanwhile, professional services firm EY said the new provisions on digital trade and visa transparency would create fresh opportunities for UK businesses operating overseas.
The agreement also includes measures aimed at supporting advanced manufacturing, clean energy and digital technology sectors, while providing stronger intellectual property protections and simplified customs procedures for exporters.
Officials said the GCC deal, combined with the recently announced India trade agreement, could add more than £8 billion annually to UK GDP in the long term.
