UK and India launch free trade agreement talks
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Negotiations between the UK the Gulf Cooperation Council (GCC), which includes Saudi Arabia and the United Arab Emirates, are underway. Zayed Al Zayani, Minister of Industry, Commerce and Tourism for Bahrain, said the six-country bloc, which also consists of Bahrain, Kuwait, Oman and Qatar, is aiming for comprehensive deal that could help boost trade with the UK. The minister confirmed during an interview with Bloomberg TV: “We’re hopeful we could get something done by the end of this year or the middle of next year.”
Britain began the process in October, and is looking to add the oil-rich Gulf bloc to a series of trade deals it has completed since its departure from the European Union.
If a deal was to materialise, it could be hugely beneficial to both sides as the UK looks to flex its muscles following Brexit.
In 2019, UK trade with the GCC was worth around £45billion – seven percent the size of Britain’s commerce with the EU in the same year.
The Brussels trading bloc and the GCC have been engaged in talks for more than 15 years over a free trade agreement, but a deal is still not in place.
Mr Al Zayani said Bahrain wants boost the contribution of tourism to its own economy to 11.4 percent of economic output by 2026.
This would be a jump of around seven percent, with Bahrain also aiming to boost visitor numbers to 14.1million people each year.
Earlier this week, it was predicted Brexit Britain’s trade deal with India could trump an agreement with the US, with the Asian superpower’s economy even outpacing the £9trillion Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
The Resolution think tank said in a report the UK’s move towards tightening relations with the Indo-Pacific region, and particularly its trade deal with India, could deliver “big economic benefits eventually comparable in scale to the now defunct US trade deal”
Sophie Hale, Principal Economist at the UK-based think tank, said a trade agreement with India could mean “big gains available for UK exporters as trade costs tumble”.
She said: “Business services – a key UK sector – is particularly well placed to benefit from what is expected to be India’s meteoric rise to the world’s third-largest import market (behind the US and China).”
The expert added India’s import demand for business services is expected to triple by 2030, meaning UK Government analysis could actually undervalue the potential opportunities for UK business service exporters.
This is dependent on the trade deal “helping to correct under-performing of UK business services in India – accounting for just 1.7 percent of India’s imports compared to four percent for Malaysia and Singapore”.
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The think-tank said India’s economy is growing much faster than the CPTPP bloc, whose imports are actually expected to grow at below the world average in the years ahead.
This is free-trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, valued at a massive £9trillion.
The report added: “While CPTPP is larger in terms of total imports, the potential gains may be smaller than a deal with India as 95 percent of trade to this group is already covered by existing agreements.”
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