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As part of plans to expand and diversify its global trade components, the GCC has started negotiations with the UK on a flexible industrial agreement that is expected to help the bloc’s economy attract investment and offer greater opportunities for local businesses.
On 22 June, the two sides officially introduced talks on a comprehensive industrial agreement, with Anne-Marie Trevelyan, British Trade Secretary, meeting with Nayef Falah Al Hajraf, GCC Secretary-General, in Riyadh.
Trevelyan then traveled to Dubai to meet with representatives of the six GCC countries: Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.
The talks, which followed months of exploratory talks, aim to conclude a flexible industrial agreement that would reduce price lists for a variety of goods and services.
The current annual industry between the GCC and the UK is around $40 billion.
While there is no official timeline for the conclusion of the deal, lawmakers in the UK and the GCC expect to publish the first negotiating circular in the third quarter of this year, with local and foreign media reporting that the two sides hope to succeed in a deal before the end of 2023.
One domain where the agreement is expected to have a significant effect is that of renewables.
Although the GCC’s oil and fuel reserves are unlikely to be included in the agreement, any eventual agreement will help gulf countries diversify their respective energy sectors and decrease their dependence on hydrocarbons.
Talks are planned to remove price lists from renewable energy infrastructure, such as UK-made wind turbine parts, while GCC countries would also gain advantages from greater access to UK blank energy technologies, such as inventions that improve energy power in homes. buildings and businesses
To this end, on Wednesday, July 27, the government of Oman will host a convention in London highlighting the other opportunities for investment in renewable energy and decarbonization in the country.
Organized through the Department of Trade, Industry and Investment Promotion, in partnership with the Oman Investment Authority and others, the “New Energy in Oman” event will feature a number of speakers from Oman and the United Kingdom, and aims to provide a forum for bilateral negotiations. meetings with British companies operating in the sector.
The occasion builds on recent developments between the GCC and the UK in the energy sector. In January, Oman and British energy giant BP signed two agreements for the structure of renewable energy and green hydrogen projects in the sultanate.
Meanwhile, in bilateral talks in March, then-British Prime Minister Boris Johnson suggested Saudi Arabia increase oil production to help secure global energy supply, underscoring the key role Gulf countries play in ensuring global energy security.
Elsewhere, informal industry negotiations are also expected to promote agricultural imports and food security.
Figures involved in the discussions have pointed to the option for the GCC to reduce or eliminate price lists of UK food and beverage imports, which lately range from 5% to 25% for products.
As well as giving a spicy touch to UK farmers, such an agreement would help food security in the GCC.
Following the disruption of global supply chains related to the Covid-19 pandemic and, more recently, Russia’s invasion of Ukraine, food safety has a more applicable factor for GCC governments, which has some of the most import-dependent countries in the world when it reaches food.
Related: Gulf Producers Raise Crude Prices Despite Recession Fears
According to the OBG, at the beginning of the pandemic, the countries of the bloc imported about 85% of their food. Almost all the rice fed in the region was imported, as well as 93% of cereals, 62% of cereals. one hundred meat and 56 consisting of one hundred vegetables.
While countries in the region have responded in recent times by increasing investment in agricultural technologies and striving more for agricultural self-sufficiency, any agreement that facilitates the import of food and beverages could further benefit the bloc’s food security.
In addition to individual sectors, the release of loose industrial negotiations is vital for the GCC as it seeks to diversify its trading partners and its position in global industry.
In addition to existing flexible industrial agreements with New Zealand, Singapore and European Free Trade Area countries Iceland, Liechtenstein, Norway and Switzerland, the GCC is in industrial negotiations with the EU, Japan, China, South Korea, Australia, Pakistan and India. . , Turkey and the South American countries members of Mercosur.
For example, as a component of its long-term economic plans, Saudi Arabia has introduced a series of megaprojects aimed at boosting economic activity in the non-oil sectors. They come with the $500 billion NEOM disintegration city, which is proposed as a high-tech city. city for citizens and companies and purposes as a tourist destination; the $8 billion Qiddiya entertainment city outside the gates of Riyadh; and the Red Sea Project, a luxury tourism progression of 34,000 km2.
The launch of the industry negotiations is, in many tactics, the culmination of a recent build of cooperation between the UK and the GCC countries.
In January, Oman and the UK signed an agreement for their already close economic ties. British corporations have long invested in Oman and have accounted for around 50% of foreign investment in the country in recent years, according to knowledge from the Oman National Statistics and Information Centre.
“The UK-GCC Free Trade Agreement will deepen the industry’s historic ties we already have with the UK, opening up significant opportunities for the sultanate’s ambitious business community. This will help our competitive position in the UK market and stimulate the expansion of goods, facilities and investments,” Qais Al Yousef, Oman’s Minister of Trade, Industry and Investment Promotion, told OBG.
“It will also provide opportunities in renewable energy, manufacturing, logistics, tourism, mining, fisheries and education, sectors for the good fortune of Oman Vision 2040 and spaces where the UK is a world leader. In fact, it has the prospect of creating and green jobs from Dover to Dhofar. It is an agreement that, once enacted, will gain advantages for Omani workers, businesses and families. A further step in bilateral relations.
Elsewhere, in a sign of similar ties, in March, Saudi Arabia and the United Kingdom signed a memorandum of understanding to form a strategic partnership council for bilateral investment and cooperation.
With $13. 2bn in bilateral industry last year, a 3. 9% increase from 2020, Saudi Arabia is the UK’s largest trading partner in the GCC, accounting for a third of its business with the block.
This followed up last May with the announcement that Qatar would invest $12 billion in the UK economy over the next five years as part of a new partnership of strategic investment components.
The deal, which builds on the country’s £40 billion ($47. 9 billion) qatari investment, will go to sectors such as fintech, zero-emission vehicles, life sciences and cybersecurity.
The deal follows an agreement between the UK and the UAE. Signed in March last year, the UAE-UK SOVEREIGN INVESTMENT PARTNERSHIP will see Mubadala Investment Company, Abu Dhabi’s personal investment vehicle, invest £800 million ($959 million) in life. science in the UK for the next five years.
The partnership was particularly expanded in September last year, when Mubadala pledged to invest an additional £10bn ($12bn) in technology, infrastructure and energy transition.
By Oxford Business Group
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