After leaving the European Union (EU), promoting FTA negotiations to expand economic cooperation with partners outside the EU is one of the UK's key goals. However, after more than four years since officially leaving the EU, the trade agreement negotiation process has yet to reach the finish line.
To overcome this situation, the UK government has just announced that it will restart negotiations on FTAs with the Gulf Cooperation Council (GCC) and a series of countries. The first round of negotiations is expected to take place this August.
Analysts say that restarting negotiations on FTAs is a necessary step, in line with the priorities of Prime Minister Keir Starmer's government. Keir Starmer has repeatedly emphasised that promoting economic growth is the focus of the new government's agenda.
According to official statistics, the UK is the world's fourth largest exporter. Therefore, opening the door to economic cooperation through FTAs will bring "golden opportunities" for businesses in the UK.
UK Secretary of State for Business and Trade Jonathan Reynolds affirmed, that high-quality trade agreements help businesses access international markets, creating more jobs and are also an important driving force for sustainable development.
To realise the above goal, London considers signing an FTA with the GCC a top priority, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).
British officials expect that negotiations, which will begin in 2022, will be completed by the end of this year, creating strong momentum for trade cooperation between the two sides.
FTAs are not the only way for the UK to expand trade with other countries and promote economic growth. However, British officials affirm that the opportunities brought by FTAs will help London shorten the path to realising economic development goals.
According to London's estimates, the FTA between the UK and the GCC will help increase the UK's GDP by 1.6 to 3.1 billion pounds by 2035. The industries that will benefit the most include manufacturing, agriculture, chemicals, textiles and services.
Resolving the final bottlenecks in FTA negotiations with India is also a priority for the British Government. The two countries officially launched negotiations in early 2022, with the expectation of increasing bilateral trade to around 100 billion USD by 2030.
However, the target of reaching an agreement by the end of 2022 has been missed, partly due to unresolved disagreements over tariffs and market access. The UK State for Business and Trade affirmed that negotiations will be restarted as soon as possible.
An FTA with India will not only help British businesses access the world's fastest-growing economy, with a market of more than 1.4 billion people but also help London take a big step forward in its strategy to strengthen relations with the Indo-Pacific region.
Along with the GCC and India, the UK also plans to resume trade negotiations with Israel, the Republic of Korea, Switzerland and Türkiye.
Analysts say that signing FTAs is a necessary step for London to boost exports, attract foreign investment, and thereby promote economic recovery. Exports are considered an important driving force of the UK economy, but weak global demand has caused the UK to suffer many negative impacts.
In 2023, the UK economy grew by only 0.1%, the lowest level since 2009. Although there were signs of improvement in 2024, the recovery is still slow. The Bank of England (BoE) forecasts that the country's economic growth will reach 1.25% in 2024 and only 1% and 1.25% in the following two years, respectively.
FTAs are not the only way for the UK to expand trade with other countries and promote economic growth. However, British officials assert that the opportunities brought by FTAs will help London shorten the path to realising its economic development goals.
