Britain’s decision to establish a post-Brexit free trade agreement with the GCC has the potential to fast track the diversification of the UAE economy, according to Links Group, the region’s leading provider of commercial facilitation and advisory services.
Led by British Prime Minister Theresa May, Britain is paving the way for a post-Brexit deal for the whole of the Gulf. It will be only the second GCC-wide Free Trade Agreement to be signed with a non-Middle East country; the first was signed with Singapore in 2013. As a member of the European Union, Britain cannot currently sign the agreement, but according to Gulf officials a draft could be ready within months.
The GCC states are currently undertaking the most drastic reforms in their histories to prepare for a post-oil era. Boosting their non-oil trade will require the building of new sectors and introduction of greater enterprise. Britain stands to benefit significantly from its deep expertise in the sectors being prioritised for growth by the Gulf countries – particularly in technology, education, healthcare, infrastructure and retail.
“A free trade agreement with the six Gulf states, coupled by a more open approach to international trade, would see UK exports to the region increase significantly. However, we expect some of the earlier gains to happen in the UAE where the business environement and state of economic diversification are more developed than in other GCC countries,” said John Martin St.Valery, Founder and CEO, Links Group.
“The UAE is already one of the most important trade partners of the UK with the two nations aiming to double their reciprocal trade to GBP 25 billion by 2020. Confidence in the UAE’s post-oil diversification strategy also continues to strengthen – the country’s high level of foreign investment is reflective of the stability within the business environment, despite an unpredictable global economy,” he said.
Recently, the Dubai FDI Monitor revealed that Dubai is among the top 10 global cities for attracting investors, ranking in seventh pace. The UAE was also listed as one of the world’s most improved economies for doing business in the World Bank’s Ease of Doing Business rankings for 2017, placing it first in the Middle East.
“In our view a UK-GCC free trade agreement will reinforce the UAE’s credentials as a leading business hub. Its historical trade ties with the UK, coupled by its existing business infrastructure and the government’s willingness to work alongside foreign investors, will likely see the UAE edge ahead as a preferred trade partner. Continuing to ensure the highest level of corporate governance and overall market transparency, will prove key to the UAE’s ongoing growth and recognition as a leading economic power,” added Martin St.Valery.