LONDON: Brexit will pave the way for deeper commercial links between Britain and Saudi Arabia with a possible bilateral free trade deal on the table as Vision 2030 gathers pace, said speakers at a conference organized by the Arab-British Chambers of Commerce.
In an interview with Arab News on the sidelines of the forum, Liam Smith, a director at the British Chambers of Commerce, said: “Thanks to the Vision 2030 program that seeks to diversify the Saudi economy and increase the country’s clout as an exporter of goods and services, the potential is there for Saudi to become an even more important trading partner for the UK than it already is.
“We have enjoyed many decades of exporting services, equipment and aircraft to Saudi Arabia. The point of a free trade agreement is that it could be reciprocated in some form and I feel confident that Saudi will become a major exporter of goods and services. It is already making major strides in the area of ‘ease of doing business.’”
Smith said that the UK would be ready to discuss a free trade agreement (FTA) either multilaterally with the GCC as a trading bloc, or bilaterally with KSA or other individual countries in the Middle East.
The conference heard from Charlie Morris, head of public engagement for trade-agreement continuity at the UK’s Department of International Trade, that Britain viewed the GCC as an “incredibly important trading partner … in leaving the EU we would look to develop that partnership even further.”
He added that doing business with the GCC is not wholly dependent on having an FTA in place. British companies already do a lot of trade with GCC countries without any such agreement. “But of course we would want to make that much easier which is why a working group has been set up to explore ways to make it happen,” said Smith.
He added that in leaving the EU, you have the opportunity that you didn’t have before to tweak standards. “However, the position of the government is that in any future trade agreements, those standards would be as good as they are now.
Victoria Hewson of the UK’s Institute of Economic Affairs said that British membership of the EU had meant it had not been able to strike trade deals in “its own name.”
She added: “Of course, it’s much harder to negotiate with 27 countries with each claiming exemptions on certain goods.
“(Acting on its own) the UK could be much quicker and more open to trade deals in the Middle East. I think there are grounds to conclude that we could be nimbler and more liberalising when it comes to trade deals with other nations after Brexit,” said Hewson.
Britain is seeking an advantage in the knowledge that the EU and GCC launched negotiations for an FTA in 1990, but an agreement has never been struck. In fact, talks were broken off in 2008 when the GCC countries suspended contact amid accusations that the EU had sought to interfere in the bloc’s internal affairs.
A recent European Commission paper on the issue said: “While periodic informal contacts have taken place since then (2008) to test whether a basis might be found to resume and conclude negotiations, these have not been successful. In parallel with the negotiations, the prospective EU-GCC FTA was subject to a sustainability impact assessment,” said the Commission.
UK exports to Arab states in 2017 was £20.9 billion. In 2016, the equivalent was £18.6 billion, according to official UK government data.