Cars queue up to use the fuel pumps at BP Plc petrol station near Guildford
When the Brexit reality caught up with UK consumers... long lines at fuel stations was one visible symptom of the painful split with the EU. But that creates opportunities for other nations and blocs. Image Credit: Bloomberg

Since its difficult Brexit separation, the UK has been striving to rearrange economic relations with countries and economic blocs and avoid many of the repercussions of its withdrawal from the European Union (EU).

The most recent – and obvious – fallout is the fuel crisis caused by a shortage of truck drivers from the EU nations, who returned to their home countries after losing the privileges they had previously enjoyed on an equal footing with their British counterparts.

Another has been the relocation of several major financial institutions, which shifted their headquarters from London, after they lost the privileges that derived from the UK being part of the EU. The British economy in general and foreign trade in particular have been affected by Brexit, further aggravated by the COVID-19 crisis.

These have altogether led to a shortage of supplies and a significant increase in shipping costs, adding more trade-specific difficulties for the British economy. Plus it still has to deal with border customs issues between Ireland, a EU member, and Northern Ireland, which is part of the UK.

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Into the breach

As the UK strives to rearrange its economic and trade relations, many countries and economic blocs are seeking to take advantage of this by concluding free trade agreements (FDAs) with the UK, particularly after such agreements faced major difficulties under complex EU laws. For example, the GCC countries have not yet been able to sign an FTA with the EU for 30 years.

Aside from its intention to sign free trade agreements with the US, Australia and Turkey, the UK is seeking to sign a similar agreement with the GCC countries, according to British Trade Minister Anne-Marie Trevelyan. Earlier this month, London took its first step towards trade negotiations with the six Gulf nations, asking British businesses to share their views about what they want a putative trade agreement to cover.

Call to private sector

This is an important call for private sector’s participation in determining the terms of the agreement, as the main party concerned with the trade sector. This is what is happening on the British side, and clearly indicates the importance the UK attaches to economic relations with the GCC.

But the question here is what about the Gulf side's preparations for this British approach, which, when done, will contribute to bringing about a significant shift in their historical trade relations with the UK. This topic has already been talked about even before Britain’s final exit, but the exceptional circumstances experienced by the GCC countries may have limited the speed of taking preparatory steps to develop perceptions about GCC’s requirements for an FTA with the UK.

An FTA is unlike other agreements, as its content will determine for many years to come the economic and trade relations with one of the most important global economies. This will likely affect various sectors and will not be limited to the commercial side alone.

This led the UK Trade Minister to invite companies and the private sector to engage in determining the terms of the agreement to be signed with the GCC countries. All of which requires similar actions by the GCC’s ministries of trade and the GCC General-Secretariat. Coupled with the need to involve the GCC Chambers of Commerce in the preparation process, as representatives of the private sector.