RIYADH: The UK has become the first G7 nation to secure a trade agreement with the Gulf Cooperation Council, in a deal projected to add £3.7 billion ($5 billion) annually to the British economy.
According to a UK government statement, the agreement with the six-member GCC bloc is also expected to generate £1.9 billion in real wage gains.
At the core of the deal is a broad reduction in tariffs. Around £580 million in duties on UK goods exported to the Gulf will eventually be eliminated, including £360 million that will be removed immediately once the agreement comes into force.
UK Prime Minister Keir Starmer hailed the agreement as “a huge win for British business,” noting it marks the government’s fifth major trade deal since taking office, following agreements with India, the US, the EU and South Korea.
“The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment,” he added.
Commenting on the deal, GCC Secretary-General Jasim Al-Budaiwi said it “will contribute to cementing the economic pathways of both regions for generations to come.”
The GCC official said that the agreement contains a framework designed to achieve tangible, sustainable, and measurable economic benefits for businesses, investors, and citizens across all seven signatory economies.
Business and Trade Secretary Peter Kyle echoed that confidence, stating the deal “sends a clear signal of confidence — giving UK exporters the certainty they need to plan ahead and reinforcing the strength and stability of the UK’s trading relationship with the Gulf at a critical moment.”
Combined with the recently announced India deal, the two agreements are expected to add more than £8 billion annually to UK gross domestic product compared to 2040 projections.
“The deal will create opportunities for companies producing iconic UK products — from butter and cheddar cheese to biscuits and chocolate — as the GCC imports over 80 percent of its food,” the statement said.
The automotive industry, along with retailers including Holland & Barrett, is also expected to benefit from lower tariffs, stronger intellectual property protections and streamlined customs procedures.
UK services — which account for around 80 percent of the British economy and roughly half of all UK exports to the GCC — will gain guaranteed market access under the terms of the agreement.
British professionals, including lawyers, engineers and consultants, are expected to benefit from easier travel and longer permitted stays in the Gulf, while visa procedures are set to become more digital and easier to navigate.
In a significant boost for the technology sector, UK companies will for the first time be permitted to store and process data outside the Gulf region, removing the need to build costly local data centers.
According to UK government estimates, bilateral trade between the UK and the GCC could rise by as much as 19.8 percent as a result of the agreement. Total bilateral investment stood at £18 billion in 2024, supporting key infrastructure projects including Heathrow Airport.
Rayan Qutub, chairman of the Logistics Committee at Jeddah Chamber, told Arab News that the UK-GCC Free Trade Agreement marks another important milestone in Saudi Arabia’s economic transformation under Vision 2030.
“The agreement supports Saudi Arabia’s long-term direction toward becoming a global trade and logistics hub while strengthening connectivity with one of the world’s leading economies,” he said.
“As Saudi Arabia continues developing advanced sectors including logistics, manufacturing, technology, tourism and infrastructure, we will likely see more international agreements that support growth, attract investment and strengthen the Kingdom’s position in global trade,” Qutub said.
He noted that improved trade flows and faster customs processes could further enhance supply chain efficiency and private-sector growth across the Kingdom.
Jassem Ajaka, an economist, told Arab News that the deal “carries transformative potential for GCC economies seeking to diversify beyond oil. The UK brings financial expertise and advanced services that Gulf nations need for their modernization agendas, while the GCC offers a dynamic, high-growth market the UK urgently needs to redefine its post-Brexit trading relationships. The partnership is, in the truest sense, a win-win.”
