皇家华人

During the autumn the UK resumed negotiations with the GCC, with both Secretary Reynolds and Minister for Trade, Douglas Alexander, making visits to the region.听

The GCC continues to be a priority market for UK dairy products, with over 拢42 million of cheese and curd exported there in 2023, up from 拢29 million in 2022, making the GCC as a bloc the UK鈥檚 second largest non-EU destination behind the USA for cheese and curd. Tariffs are generally set low at 5% but any reduction in tariffs, as well as the resolution of non-tariff barriers to trade, as part of a trade deal could further support the growth of UK dairy exports to the region.听

Opportunities for lamb

Lamb and goat meat exports totalled 拢9.9 million in 2023, accounting for 43% of our non-EU market, with most exports to the region destined for Kuwait. There is a great opportunity here to be able to export more high quality, predominately grass fed, and halal certified lamb to the GCC. 皇家华人would welcome the liberalisation of tariffs on British frozen lamb entering the GCC, matching the already liberalised fresh lamb tariff lines.

Rules of origin for sugar

Comparatively cheap land and energy costs means that the GCC has a strong sugar refining sector. 皇家华人wishes to see the inclusion of robust rules of origin provisions within the FTA, which prevents sugar imported from countries such as Brazil and India from being further processed in the GCC and subsequently benefitting from trade liberalisation with the UK.

皇家华人remains clear that the UK sugar industry is one of our real homegrown success stories and should be protected through robust rules of origin and market access provisions in all the UK鈥檚 trade agreements.听

Address non-tariff barriers

皇家华人also urges the government to use this agreement to address non-tariff barriers to trade as these barriers currently pose significant challenges for UK exporters when accessing the GCC market.

The GCC is not a single market and, as such, legislative standards and regulations vary between members states.

Complying with the relevant requirements, including significant non-tariff barriers, is time consuming, complex and ultimately adds cost to UK exporters. To ensure UK businesses can make the most of opportunities in the GCC market, and capitalise upon any tariff liberalisations secured, negotiators must also work to reduce these barriers and streamline market access procedures.

In particular, the NFU would welcome an agreement to notify parties in advance of changes in standards, to allow UK exporters sufficient time to adapt.听

听

Following the election of the Labour Government, on 29 of July the Secretary of State for the Department of Business and Trade, Jonathan Reynolds, reaffirmed the UK Government鈥檚 intention to deliver a Free Trade Agreement with the GCC. 

By the end of Round 6, draft treaty text had been advanced across the majority of chapters and technical discussions had been held across a broad range of policy areas.

Good progress had been made and both sides remain committed to securing an ambitious, comprehensive and modern agreement fit for the 21st century.

皇家华人has engaged with government negotiators at the end of each round.

The negotiations timeline has been as follows:

• Round 6: 29 January 鈥� 9 February 2024
• Round 5: 5 鈥� 16 November 2023
• Round 4: 17 鈥� 28 July 2023 
• Round 3: 12 鈥� 16 March 2023 
• Round 2: 5 鈥� 9 December 2022
• Round 1: 22 August 鈥� 29 September 2022

Round 1 of the UK and Gulf Cooperation Council FTA negotiations started on 22 August 2022. Running for two weeks, this initial round is likely to focus on understanding each other鈥檚 objectives from the negotiations.

On Wednesday 22 June the UK government launched its Free Trade Agreement negotiations with the Gulf Cooperation Council.

The GCC is made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, is home to more than 57 million people and imports around 90% of the food it consumes.

As the world's largest oil and gas producing region, the GCC enjoys the highest standard of living in the Middle East. The expansion of tourism in the region creates a huge opportunity for British food, particularly in the food service and hospitality sector.

Dubai alone attracts more than 16 million tourists a year, occupying 70,000 hotel rooms.

President of the NFU, Minette Batters said: 鈥淯K farmers would certainly welcome increased market access and enhanced terms of trade with the GCC.

鈥淭he region is already well served with British agri-food exports, capitalising on strong recognition of British product in the market with our exports known for their safety, quality and high standards.

鈥淚n particular, we continue to see considerable growth in dairy and red meat exports to the region, and with an expanding population with increased disposable income and the expansion of tourism, there is opportunity to grow UK agri-food exports into the region further.鈥澨�

Opportunities for British producers

Tariffs on UK agri-food products to the region are already set relatively low, at 5% for frozen meat, dairy and processed products or 0% for fresh meat and some fruit and veg, but negotiators should seek to remove tarriffs where they exist.

UK products are already highly sought after for their quality and heritage with UK lamb exports growing by 652% to the region between 2018 and 2019.

Lamb

There is a strong tradition of consuming sheep meat in the region with demand continuing to grow. Per capita consumption of sheep meat in Kuwait is 9kg/head/annum, 11.8kg/head/annum in UAE and 12.3kg/head/annum in Qatar.

The main supplier is Australia followed by New Zealand.

The main current barrier to increasing UK exports to the region is shelf life of UK product which has an average shelf life of 40 days compared to the southern hemisphere of 120 days.

Shipping more frozen lamb would help to overcome the shelf life limitations and in negotiations the UK should look to remove the 5% tariff applied to frozen lamb.

All sheep meat exported to the region must be halal.

The UK can now demonstrate assurance of halal acceptability of stunning methods in the UK through the Defra supported protocol which was endorsed by the participating halal certification bodies. This places the UK in a good position to supply the GCC as quality assurance in the market equates to halal.

Dairy

The GCC countries are huge importers of dairy, with the UAE being an important market importing 2,400 tonnes of cheese in 2018.

Although volumes are currently relatively modest, there is significant potential to grow exports, especially if the GCC were to remove the 5% tariff currently applied to dairy products entering from the UK.

Cereals

The GCC is a net importer of cereal products with tariffs set on wheat, barley and oats at 0%, with tariffs on malt at 5%.

In 2020 the UK exported 66,000 tonnes of barley to the region.

In the past, Russia, Australia and the US have all been major suppliers of grain to Saudi Arabia, and if the UK has exported its tended to be in bulk shipments.

However, the establishment of an FTA could encourage more regular shipments from the UK.

Horticulture

The GCC market is highly competitive with every large fresh produce country accessing it.

The UK does export some fresh produce to the region with the majority being air freighted.

However, transport time and time take to clear the border has been a strong limiting factor in the past. Within negotiation there is potential to address these non tariff barriers and look to expediate border procedures to allow perishable product to get into the market quicker.

Possible hurdles

Tariffs

While tariffs on agri-food products entering the GCC market are relatively low, the NFU wants to see them eliminated altogether.

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.

Feedback

We would welcome feedback from any members with experience or knowledge of trade with the region. Please email [email protected]

UK trade talks with the Gulf region could provide a new export market for farmers, despite a number of hurdles. Read our market analysis.

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.

鈥淸Consumers] are prepared to pay premium prices for quality products and in most of the sectors British is seen as being high quality.鈥�

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 鈥渙verwhelmingly positive鈥� for UK exporters, with meat and dairy products particularly set to benefit, alongside opportunities for fruit and vegetables, cereals and sugar confectionery. 鈥淚t鈥檚 the world鈥檚 largest oil and gas-producing region, with a high standard of living and many consumers with quite large disposable incomes,鈥� she said. 鈥淭hey are prepared to pay premium prices for quality products and in most of the sectors British is seen as being high quality.鈥�

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.

Halal and religious preferences

All GCC members are Islamic states. There are strict rules around the importation of products of animal origin. All GCC members except the UAE ban pork. Even in UAE there are heavy restrictions, making the region largely inaccessible to pork exporters.

鈥淐learly all meat going into the region has got to be halal,鈥� Gail said. 鈥淲e are really looking at beef and lamb from the UK鈥檚 perspective. 皇家华人has done quite a lot of work with Defra and other organisations in this area and it all comes down to certification ultimately.鈥�

The UK is now able to demonstrate assurance of halal acceptance of stunning methods through a new Defra-supported protocol that is endorsed through participating halal certification bodies. Beyond that, the NFU has proposed a number of ways the government could help back the halal market at home and abroad. These include:

• backing the Demonstration of Life protocol
• recognising and supporting the commercial mechanisms in the sector that already drive demand for assured halal products without regulatory intervention
• engaging with the food industry and halal sector to establish a forum for recognising and developing halal standards.

The DIT (Department for International Trade) launched a 14-week consultation on a proposed trade deal with the GCC. 皇家华人gathered input from members to inform its response. The consultation is now closed.

New export opportunities

In 2020, the NFU welcomed the announcement that the government would be introducing a dedicated food and drink counsellor in the British embassy in Dubai to cover the Gulf region. The government hopes that the negotiation of a free trade agreement will help secure better market access and deliver commercial export opportunities for UK agri-food businesses, further promoting in-demand British produce in the GCC.

NFU director of trade and business strategy Nick von Westenholz said: 鈥淲e support any endeavours that open up export opportunities with blocks such as the Gulf Cooperation Council. The Gulf, like other markets in the Middle East, Far East and North Africa, presents a bright prospect for UK farmers and food businesses.鈥澨�

Sought-after British produce

Nick added: 鈥淥ur farmers produce high-quality food that they themselves don鈥檛 necessarily produce in large quantities and so rely heavily on imports. This includes lamb and beef 鈥� of which 90% of consumption in the region is imported 鈥� as well as cereals, British fruits and dairy products. Our high standards of safety and traceability, and the attractiveness of the British brand, add to the value of UK agri-food for markets such as those in the GCC.

"These markets are far more characteristic of a trade policy that supports and promotes British farmers than some of the other deals the UK government has prioritised.

"We look forward to responding to the government鈥檚 consultation and examining the potential opportunities in detail in the coming weeks.鈥�

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