British Prime Minister Theresa May, outlined plans for a “hard-Brexit” last week that would see Britain leaving the single market and seeking trade ties outside the continent.
With its high-growth rate and access to large markets, the Gulf Cooperation Council (GCC) is well positioned to strike a trade deal with a post-Brexit “Global Britain.”
Gulf states have approximately 53 million consumers and a combined gross domestic product of $1.4 trillion (Dhs5.14 trillion), that is much more attractive than Europe and Britain’s other trading partners.
Aruba Khalid, a senior analyst at Abu Dhabi think-tank, the Delma Institute, said that while May’s speech didn’t tell us anything new, it reaffirmed a “hard Brexit” approach for Britain, that would ultimately benefit the GCC bloc.
“Up to the speech, there had already been the consensus forming that if the UK does leave the EU entirely, leave the common market, it will be net positive for the the GCC and UAE.”
A country leaving the single market entirely would need to build strong trade ties with outside regions that offer a high-growth potential and access to bigger markets, like the GCC, she explained.
Although the UK will not officially leave the EU bloc until 2019, a recent spate of high-level visits by UK officials indicates that a GCC trade deal would be on the cards in the next five years, Khalid added.
“If that does go through, I think it would be very positive for UAE businesses. I think the sectors that would benefit are finance, legal services, financial services, and technology and knowledge transfer. These companies are set to benefit in the short-term, in the region and in the UAE.
“The GCC is one of their historical partners, and there has been a historic shift towards the GCC anyway. Over the past few months, there’s been a lot of high-level visits to the region.”
A visit by the UK Premier to the UAE in December and the arrival of UK Finance Minister Philip Hammond in Abu Dhabi in January, to gauge a post-Brexit trade deal, reaffirmed that the region would play a leading role in Britain’s post-Brexit future.
Birmingham city council this week concluded a three-day business tour of the Arabian Gulf seeking $6.5 billion (Dhs23.9 billion) of Qatari cash to regenerate the city’s infrastructure, a project described by Council leader John Clancy as a “post-Brexit resettlement.”
In December, Brexiteer-in-Chief, British Foreign Secretary Boris Johnson, also arrived in Riyadh in a display of support for Saudi Arabia’s security policy in wars in Yemen and Syria, and to strengthen diplomatic ties with the Kingdom.
Freedom to deal
A clean break from the EU would also release Britain from the grouping’s restrictions on uni-lateral trade outside the common-market, giving Britain the freedom to trade with whomever they please, Andrew Prince, an Independent Financial Adviser in the UAE said.
“By exiting the EU altogether, it would enable the UK the flexibility to negotiate with any country and agree on terms relatively quickly. The UK and UAE have had a long and prosperous relationship which in my opinion, can only be strengthened by the ability to negotiate terms between our two great countries individually.
According to the UAE embassy in the United Kingdom, the UAE accounts for about £13 billion (Dhs58.77 billion) of the £30 billion of trade that Britain has with the GCC economies.