Key insights
- The UK's new trade deal with the Gulf Cooperation Council is projected to add £3.7 billion to the UK economy annually. While positive for the UK, the deal has a slightly negative influence on the US market as it could divert some trade and investment away from the US, exacerbating existing economic pressures.
Investing.com -- The United Kingdom on Wednesday announced a trade agreement with the Gulf Cooperation Council, becoming the first G7 nation to secure such a deal with the bloc.
The agreement is projected to add £3.7 billion ($4.9 billion) to the UK economy annually and increase wages by £1.9 billion per year over the long term, according to the Department for Business and Trade.
The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The deal is expected to eliminate an estimated £580 million in annual duties based on current UK exports to the region once fully implemented, with £360 million of tariff reductions taking effect immediately when the agreement comes into force.
British exports including cereals, cheddar cheese, chocolate and butter will become tariff-free under the agreement’s terms.
"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," Prime Minister Keir Starmer said.
"The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment," Starmer added.
The announcement comes as Starmer faces leadership challenges while the UK economy continues to experience pressure from the Iran war.
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