UK Signs £3.7 Billion Trade Deal with Six Gulf States

UK Prime Minister Keir Starmer has finalized a trade agreement with six Gulf states, calling it a “huge win” for British businesses and concluding four years of negotiations that involved four different prime ministers.

The government said the deal will generate £3.7 billion in export opportunities, double the initial estimate, particularly benefiting sectors such as food, luxury cars, defense, aerospace, hospitality, and other services.

The agreement offers Starmer a political boost after recent local elections, demonstrating his government’s ability to complete deals amid turmoil and potential leadership challenges.

However, Starmer faced immediate criticism because the deal does not include a human rights chapter, despite complaints about a “values free” agreement raised a year ago.

Tom Wills, director of the Trade Justice Movement, said the omission was “especially alarming given the severe human rights abuses across the Gulf region, including torture, forced labour, discrimination, and the silencing of dissent.”

The government explained it did not seek a human rights chapter because it believes political channels are the most appropriate venue for addressing such issues.

The National Farmers Union praised the deal as the best agricultural agreement since the UK left the European Union, after successfully resisting demands to lower poultry standards.

The British Chambers of Commerce (BCC) said the agreement will create new business opportunities in financial services, energy, construction, professional services, education, hospitality, and technology.

William Bain, head of trade policy at the BCC, said the deal offers “great potential to expand trade in the region” and will be “vital for tens of thousands of UK firms.”

This is the third trade deal concluded under Starmer, following pacts with India and South Korea, and will eliminate tariffs on 93% of British goods sold in the Gulf Cooperation Council (GCC) countries: Saudi Arabia, Kuwait, Oman, Qatar, United Arab Emirates, and Bahrain.

Zero tariffs will apply to sectors including food, medical equipment, defense, aerospace, and advanced manufacturing.

Previously, exporters to the GCC faced a blanket tariff of 5%, with higher duties on some products; for example, cheddar cheese was taxed at 6%, chocolate and biscuits at 15% and 10% respectively, and cars at 5%.

As part of the agreement, Gulf states have also agreed to allow UK firms to store data outside the region for the first time.

The government said UK services, which account for 80% of the British economy, will receive “guaranteed access” to business in the six Gulf states.

Tom Bradshaw, president of the National Farmers Union, who had worried about concessions on poultry standards, hailed the deal, saying: “We think this is probably the best negotiation we had for agriculture. We are really happy.”

Starmer said: “Today’s agreement is a huge win for British business, and for working people, who will feel the benefits in the years ahead through higher wages and more opportunities.”

Business Secretary Peter Kyle said he was proud that the UK is the first G7 country “to secure a modern and ambitious trade deal with the GCC.”

Gulf states export few goods beyond petrochemicals to the UK, which already enter duty-free; the deal is seen as a significant political affirmation for the Gulf countries and a boost for bilateral investment.

The agreement also underscores the importance of Gulf investment in British assets, including Heathrow Airport, which is part-owned by Qatar, and Newcastle Football Club, which is part-owned by Saudi Arabia.

Wills expressed concern about investor protection chapters, warning they could lead to lawsuits in the UK if government policy changes, such as on a third runway at Heathrow.

Paul Nowak, general secretary of the Trade Unions Congress, which raised concerns about human rights provisions a year ago, said it was “disappointing” that a deal was signed “despite their appalling record of human right and workers’ rights.”