In this article, previously published in British Farmer & Grower magazine, we look at the opportunities for British farming that could come from a new trade agreement with the Gulf Cooperation Council (GCC).
The GCC comprises the UAE, Saudi Arabia, Qatar, Bahrain, Kuwait and Oman. It is a region that imports virtually all its food and has demand for top-quality British produce.
It is already an important trading partner for the UK, with almost £22bn of UK exports and bilateral trade worth over £30bn in 2020. More than £597m of British food and drink was shipped to GCC countries last year.
The government hopes a deal could be agreed by the end of this year, breaking down barriers to a huge food and drink market for British business.
“[Consumers] are prepared to pay premium prices for quality products and in most of the sectors British is seen as being high quality.”
Gail Soutar, NFU chief international trade adviser
Opportunities for British food producers
The NFU's chief international trade adviser Gail Soutar said the deal looks 'overwhelmingly positive' for UK exporters, with meat and dairy products particularly set to benefit, alongside opportunities for fruit and vegetables, cereals and sugar confectionery. “It’s the world’s largest oil and gas-producing region, with a high standard of living and many consumers with quite large disposable incomes,” she said. “They are prepared to pay premium prices for quality products and in most of the sectors British is seen as being high quality.”
British retailers such as Waitrose and M&S already operate in the region, which is renowned for its large British ex-pat community. There are also opportunities in foodservice, airline catering and the travel and tourism sector. Dubai in particular is a holiday and business hotspot that attracts a wealthy international clientele. Saudi Arabia has ambitions to increase tourism, while the World Cup in Qatar will bring an influx of visitors. In a part of the world that imports around 90% of the food it eats, the potential is clear.
Hurdles
- Tariffs. While tariffs on agri-food products entering the GCC market are relatively low, the NFU wants to see them eliminated altogether. This is especially important because the GCC is also in negotiations with the EU and Australia and it's important the UK is not at a competitive disadvantage.
- Independent states. The GCC is not a single market. There are often cases where regulations are either implemented at different times or enforced differently across the six nations. The GCC has 955 SPS (sanitary and phytosanitary) and 3,823 TBT (technical barriers to trade) measures, compared to 4 and 56 respectively in the UK, making compliance with non-tariff measures time consuming, complex and potentially costly.
- Labelling. The GCC has complicated and strict rules around product labels. For example, imported meat must have at least 50% of its shelf life remaining. There are also differences in legislation across the states.