{"id":98777,"date":"2026-09-18T22:03:00","date_gmt":"2026-09-18T22:03:00","guid":{"rendered":"https:\/\/gulftimes.ae\/?p=98777"},"modified":"2026-09-18T22:03:00","modified_gmt":"2026-09-18T22:03:00","slug":"arab-news-can-the-uk-gcc-trade-deal-weather-gulf-conflict-and-tensions-at-home","status":"publish","type":"post","link":"https:\/\/gulftimes.ae\/?p=98777","title":{"rendered":"Arab News | Can the UK-GCC trade deal weather Gulf conflict and tensions at home?"},"content":{"rendered":"


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War in the Gulf and renewed calls for constitutional change in Britain are testing the foundations of the UK\u2019s free trade agreement with the Gulf Cooperation Council, even before its promised benefits take effect.<\/p>\n

Threats to shipping present the immediate challenge. Longer term, any breakup of the UK would raise questions about how the agreement applies to new states and whether they could retain its trading advantages.<\/p>\n

The deal, agreed in May, is expected to add \u00a33.7 billion ($5 billion) annually to the UK economy in the long run, according to British government projections.<\/p>\n

The GCC\u2019s tariff reductions would cover about 93 percent of UK goods exports, after a transition of up to 10 years, saving an estimated \u00a3580 million in annual duties. The UK would remove tariffs on all current GCC exports when the agreement takes effect.<\/p>\n

Britain Minister of State for Trade Chris Bryant takes a group photo with Jasem Mohamed Albudaiwi, secretary general of the Gulf Cooperation Council, and delegation members during a signing ceremony at Downing Street in London, Britain, May 20, 2026. (Pool via REUTERS)<\/figcaption><\/figure>\n

For businesses, however, the value of those concessions depends on whether goods can be transported safely and investors retain confidence in the relationship.<\/p>\n

Neil Quilliam, an associate fellow with Chatham House\u2019s Middle East and North Africa program, told Arab News that tariff reductions were valuable, but \u201cthey deliver their full benefits only when trade routes are secure.\u201d<\/p>\n

The current disruption in the Strait of Hormuz illustrates that vulnerability. Reuters reported on Sept. 18, citing preliminary Kpler maritime data, that four commodity vessels had passed through the strait the previous day, below the 10-day average of 16.<\/p>\n

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Figures cited in the reporting put the decline in traffic since April at 95 percent. They also put the strait\u2019s share at 38 percent of crude oil, 29 percent of liquefied petroleum gas and 19 percent of liquefied natural gas flows.<\/p>\n

The original reporting also describes US military escorts as having helped shipping, while the passage remains widely regarded as effectively closed.<\/p>\n

Quilliam said the crisis demonstrated \u201chow quickly disruptions to a strategic waterway can affect trade flows, energy markets, shipping costs and investor confidence,\u201d making the distinction between economic and maritime security \u201cdifficult to sustain.\u201d<\/p>\n

For Gulf partners, closer commercial ties have sharpened expectations that Britain will also contribute to regional security.<\/p>\n

\u201cIt is difficult to overlook the degree of expectation across the Gulf during the Iran war that the UK would play a more active role,\u201d Burcu Ozcelik, a senior research fellow for Middle East security at the Royal United Services Institute, told Arab News.<\/p>\n

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Cargo terminal for transshipment of grain, containers and other cargoes. Jeddah Port, Saudi Arabia. December 2018. (Shutterstock)<\/figcaption><\/figure>\n

Britain has provided military support. In a statement to Parliament on March 9, John Healey, the defense secretary at the time, described British aircraft intercepting threats to Gulf allies and conducting defensive air operations in support of the UAE.<\/p>\n

The question raised by Ozcelik therefore is whether Britain\u2019s response meets the expectations of partners whose commercial appeal depends on security as well as market access.<\/p>\n

Diversification of supply chains could improve resilience, she said, but such measures were not sufficient \u201csubstitutes for addressing underlying Iranian threats.\u201d<\/p>\n

Iranian attacks and threats endangered more than infrastructure, she added. They also threatened \u201cthe wider economic oasis that the Gulf has been,\u201d by undermining the conditions that attracted international businesses and investors.<\/p>\n

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British Minister of State for Trade Chris Bryant and Jasem Mohamed Albudaiwi, secretary general of the Gulf Cooperation Council, take part in a signing ceremony at Downing Street in London on May 20, 2026. (Pool via REUTERS)<\/figcaption><\/figure>\n

Quilliam and Ozcelik said Britain could help by combining its diplomatic efforts with maritime security, intelligence cooperation, and air and missile-defense support.<\/p>\n

Ozcelik urged Britain to view the Gulf as more than a \u201csimple marketplace.\u201d She argued that the credibility of the free trade agreement depended on whether Gulf governments believed Britain took their \u201ccore security concerns seriously.\u201d<\/p>\n

The conflict could also affect the investment available for Britain, if Gulf governments direct more of their spending toward domestic defense and reconstruction.<\/p>\n

Quilliam, however, said the crisis reinforces the case for the trade agreement. He said that \u201cif anything, the crisis strengthens it,\u201d because commercial interests were closely \u201ctied to regional stability.\u201d<\/p>\n

Marco Forgione, director general of the Chartered Institute of Export and International Trade, also said there were reasons to deepen the partnership.<\/p>\n

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Thames Gateway Docks in Kent. (Shutterstock)<\/figcaption><\/figure>\n

He told Arab News that \u201cinstability raises the premium on reliable partners, transparent legal frameworks and diversified relationships, which gives the UK a strategic advantage.\u201d<\/p>\n

He added: \u201cLocking in long-term investments in stable, reliable markets is a form of insurance that helps both UK and Gulf investors, and the (free trade agreement) is designed to build further on this existing partnership.\u201d<\/p>\n

The \u201cpreconflict baseline\u201d showed considerable scope for growth, Forgione said, as he put the value of UK-GCC trade in 2025 at more than $71 billion and described the bloc as Britain\u2019s 10th-largest trading partner.<\/p>\n

\u201cSince February 2026, indicative data shows a sharp shock, with UK exports down by up to 25 percent, with some sectors suffering a much bigger reduction; for example, sheep-meat trade has dropped by 80 percent,\u201d he said.<\/p>\n

Nevertheless, Forgione said his conversations with business leaders suggested companies were preparing for the end of the conflict by examining tariff reductions, rules of origin and service providers \u201cso they can move quickly.\u201d<\/p>\n

While the conflict in the Gulf presents immediate risks, constitutional tensions within the UK raise a different set of questions about the future reach of the agreement.<\/p>\n

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Britain\u2019s Minister of State for Trade Chris Bryant and Jasem Mohamed Albudaiwi, secretary general of the Gulf Cooperation Council, attend a signing ceremony at Downing Street in London on May 20, 2026. (Pool via REUTERS)<\/figcaption><\/figure>\n

At a meeting in Cardiff this week, the first ministers of Wales, Scotland and Northern Ireland signed a memorandum saying \u201cconstitutional change is coming\u201d and urging the UK to \u201cprepare for, plan and facilitate constitutional change in each jurisdiction.\u201d<\/p>\n

They participated as party representatives. Their movements have differing objectives: Plaid Cymru and the Scottish National Party support Welsh and Scottish independence, while Sinn Fein seeks Irish reunification. Northern Ireland\u2019s government also includes unionists under its power-sharing arrangements.<\/p>\n

These distinctions matter for trade. Irish reunification would involve joining an existing state, whereas Scottish or Welsh independence would create new ones. Their future trading arrangements cannot be treated as identical to the current situation.<\/p>\n

Robert Mogielnicki, founder of Paris-based PoliSphere Advisory and a nonresident fellow at the Arab Gulf States Institute, said he considers a breakup of the UK unlikely but Gulf investors would \u201cmanage\u201d if it did happen.<\/p>\n

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Cargo terminal for transshipment of grain, containers and other cargoes at Jeddah Port, Saudi Arabia, in late 2018. (Shutterstock)<\/figcaption><\/figure>\n

For Scotland, the Gulf is an important market. Figures cited in the reporting put the value of exports of Scottish goods to the region at about $1 billion last year, including drinks, machinery and salmon.<\/p>\n

James Keating, of Scottish Development International, told Arab News that the UK-GCC free trade agreement \u201cis likely to be one of the most significant trade agreements for Scottish exporters in the Middle East.\u201d<\/p>\n

He added: \u201cIt won\u2019t transform trade overnight, but should improve market access, reduce barriers and create greater certainty for Scottish businesses in sectors where Scotland already has strong competitive advantages, including energy transition, food and drink, and science.\u201d<\/p>\n

A constitutional expert told Arab News that Scottish independence need not derail the agreement; its future application would depend on the approach taken by the newly independent state, those that remain in the UK and the GCC.<\/p>\n

The expert suggested that a customs union with the remainder of the UK could offer a route to preservation of trading arrangements, although it would constrain the new state\u2019s freedom to set its own trade policy.<\/p>\n

A state seeking a separate agreement with the GCC might receive less favorable terms, the expert warned. Any continuity would depend on negotiations rather than follow on automatically from independence.<\/p>\n

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Thames Gateway Docks in Kent. (Shutterstock)<\/figcaption><\/figure>\n

Another source told Arab News that UK authorities might permit some negotiations before formal separation, depending on how the process unfolded.<\/p>\n

Mogielnicki said Gulf investors would probably have time to prepare because \u201cinstitutional change can and does happen\u201d but \u201cit usually unfolds very slowly, giving plenty of time for external actors to adjust accordingly.\u201d<\/p>\n

He added: \u201cCrises and disruptions always create opportunities. If this low-likelihood scenario occurs, there will absolutely be some form of creative destruction involved, which I suspect Gulf investors will seek to exploit.\u201d<\/p>\n

For now, implementation of the agreement remains the immediate priority. A British government source told Arab News that the deal was \u201cnot behind schedule\u201d and work was proceeding \u201cas standard\u201d to bring it into operation \u201cas soon as possible.\u201d<\/p>\n

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