DUBAI: The GCC bloc, with its strategic location and fast-growing economies, could be a latter-day Venice, balancing between East and West, based on Paul McGrade, a former UK authorities adviser and an skilled on UK and European commerce coverage, who was talking because the GCC and the UK put together to launch the third spherical of their free commerce talks.

He predicts that the UK’s makes an attempt to forge free-trade agreements with the US and India will meet with failure, in distinction with an FTA cope with the GCC, which might work regardless of the 2 sides’ coverage variations over China and Russia.

He additionally asserts, citing opinion surveys, that the British public now really feel that “Brexit was a mistake and has introduced prices and really, only a few advantages.”

McGrade made the feedback throughout an look on “Frankly Talking,” the Arab Information present affairs speak present that dives deep into regional headlines by talking with main policymakers and enterprise leaders.

He mentioned what a GCC-UK commerce deal would entail, whether or not an settlement might materialize earlier than the tip of this yr and, given the political upheaval of the final 12 months, whether or not GCC leaders might actually belief the British authorities’s commerce guarantees.

“The GCC area will nonetheless have robust hyperlinks with China. Power wants there are enormous and rising. (However I hope) the area will proceed to have robust hyperlinks with the West,” he mentioned.

“There’s a troublesome balancing act that’s going to get more durable within the many years forward. However the area may be very strongly positioned and, you (can) already see with the UK, and Europe extra broadly, a stronger recognition that this can be a strategic partnership, or a set of strategic partnerships, that they will’t afford to disregard.”

Final month, the UK authorities mentioned it was dedicated to signing a major commerce cope with the GCC. Nevertheless, given the political roller-coaster journey that the UK went on in 2022 and the truth that it’s not the manufacturing big of the final century, many surprise why GCC international locations ought to nonetheless have an interest and whether or not they can belief that the UK will ship.

“It’s a good query after six years actually of instability within the UK, a rustic that all the time prided itself and partly offered itself on its political stability and its business-friendly regulation. It has been a little bit of a roller-coaster, however I feel that the excessive tide of Brexit disruption has handed,” McGrade mentioned.

He mentioned though the Tory authorities and the primary opposition Labour Celebration declare they’re dedicated to creating Brexit work, what they actually imply is sound public funds, a extra steady regulatory relationship with Europe, a extra predictable one the place primarily the UK will broadly comply with what the EU is doing in huge areas like net-zero.

“This provides buyers some confidence,” he instructed Katie Jensen, the host of “Frankly Talking.”

“The UK shouldn’t be going to be towing itself off into mid-Atlantic or the Pacific Ocean. It’s going to be geographically, clearly and in regulatory phrases, very firmly anchored within the European neighborhood. That offers a little bit of confidence and a little bit of stability going ahead. And the UK wants funding, which has dropped off sharply for the reason that 2016 vote.”

Because the West decouples from China, specialists say it would want robust relationships with the Gulf states. McGrade believes the warfare in Ukraine has refocused minds on the significance of the strategic partnership with the Gulf international locations. “Not simply by the commerce deal, which might assist in some areas, but it surely’s a broader image,” he mentioned.

“There’s an enormous alternative right here for Gulf states and their buyers to sort of reshape this relationship within the sectors that they may wish to draw into their very own economies when it comes to constructing sustainable, high-skilled fashions for the longer term.”

The Conservative authorities within the post-Brexit period had promised that Britain would be capable to make commerce offers everywhere in the world. Nevertheless, they missed their targets final yr. The UK has solely signed commerce agreements with about 60 p.c of their international commerce companions and talks with the US and India have stalled.

“A few of these (commerce) talks have stalled, however a few of them in all probability weren’t very practical anyway,” McGrade mentioned. “The home politics on either side of the Atlantic in all probability dominated out the sort of deep commerce cope with the US that some Brexiteers mentioned they wished.”

As for India, he mentioned the nation doesn’t “actually have a contemporary bold free commerce cope with (any entity). It’s an economic system that’s wrestling with its personal inner divisions over levels of defending its home trade. And there are politics at play on issues like visas.”

He continued: “It’s a unique image once you have a look at the Arab world and particularly the GCC, as a result of there’s a really robust historic relationship. There are clearly troublesome points in any commerce deal about market entry, however the relationship might be extra constructive and the politics more easy across the content material of that commerce deal.”

Elaborating on the potential for cross-border investments, McGrade mentioned: “A number of the UK’s financial sectors are in a weak place. (However) a few of the fundamentals are fairly robust in areas like well being tech, digital well being. We now have acquired Arab Well being Week, after all, and inventive industries, net-zero know-how, the standard strengths and areas like banking, different skilled providers.

“These are sectors that matter to Gulf economies and should matter more and more, as we glance to sort of constructing a sustainable net-, post-net-zero economic system. So, there’s quite a bit on provide within the UK and doubtless a few of it’s underpriced due to the financial hit that the nation has taken over the previous few years. This in all probability is an excellent time to speculate, whether or not or not we now have a commerce deal shortly. However this commerce deal doubtlessly is a better one to do than, say, US or India in political phrases.”

The Gulf states are robust strategically however the relationship with the UK will must be two-way, specialists say, with British innovation holding the promise of serving to the previous to develop into high-skilled, high-tech economies.

McGrade, for one, is assured that because the UK seeks to diversify its commerce and funding relationships, the Gulf states can be essential in offering entry to new markets, vitality sources and different areas.

“(They’re) going to be important, (when) you see a Europe reducing itself off from conventional Russian provides of oil and gasoline, and can also be recalibrating the connection with China,” he mentioned. “The US talks overtly about decoupling from Chinese language provide chains. The UK talks an identical sort of language. The UK might be a bit nearer to the US than a few of the huge European powers on this.

“If that’s the sort of world that we’re going to, then the Gulf states develop into extra essential than ever, not only for vitality, however for the markets that they symbolize, the funding and the partnerships that they’re trying to construct.”

“Take a look at the size of the ambition within the Gulf, not only for form of funding for return, however for the massive long-term sustainability challenge that (Gulf) governments, sovereign wealth funds and different buyers are aiming for. There’s an enormous alternative for real partnerships the place a few of these revolutionary applied sciences that the UK nonetheless excels at might be part of increase that sustainable expertise base in Gulf economies.”

The UK estimates that an FTA with the GCC would add about £1.6 billion ($1.98 billion) to its economic system. So, the place does McGrade see probably the most positive aspects for international locations corresponding to Saudi Arabia and the UAE?

“A commerce deal is good to have, but it surely’s not important. These are already fairly open economies in international phrases. They have already got robust buying and selling relationships with the UK. A commerce deal might assist scale back a few of the obstacles, but it surely’s not the most important sport on the town,” he mentioned.

“The broader image is trying on the sectors the place UK innovation particularly can assist obtain the long-term strategic goals of nations like Saudi Arabia and the UAE. For those who have a look at a few of the actual strengths, in medical know-how, well being know-how, digital well being, we now have plenty of innovation within the UK market, which is usually underpinned by the truth that you’ve this nearly distinctive knowledge set as a result of you’ve an enormous nationwide well being service masking form of 60 million individuals.”

McGrade believes the inventive sector is one other huge supply of the UK’s international power, which may be essential for areas like tourism and tradition, by which some Gulf states have made an enormous funding. “There are areas like schooling which can be conventional strengths and the place there’s already a presence within the area from the UK,” he mentioned.

“The skilled providers, banking and monetary providers is an apparent one. However we more and more see authorized and accounting providers in addition to form of administration consultancy establishing and rising their presences within the area.”

He subsequent turned to what he referred to as one other huge space, “which is the know-how round net-zero, attending to net-zero, however serving to make that sustainable and construct economies that will likely be quick rising and wealthy, and excessive expert past the dependence on hydrocarbons.”

“There’s quite a bit there. Sovereign wealth funds within the area are already investing in a few of these sectors. In some circumstances, what they’re in search of in a partnership is to convey a few of these expertise again house to the area in order that they can be utilized to assist construct up the home excessive expertise and excessive tech that will likely be wanted (within the) long term into the century to maintain high-growing wealthy economies within the Gulf area.”

However what occurs if the UK fails to signal a selected cope with the GCC as a complete? Does it then have the choice to take a look at single particular person commerce offers with, say, the UAE, Saudi Arabia and Qatar?

McGrade says this has been taking place in truth. “It’s been signing particular person agreements throughout some sectors with a few of the GCC members. That may proceed,” he mentioned.

“Regardless of the governments do, these financial fundamentals should be engaging to Gulf buyers, whether or not that’s on the state, sort of sovereign wealth fund stage or sort of enterprise stage, as a result of a few of these strengths of the UK economic system, innovation throughout a number of sectors, can actually be a part of the reply to what Gulf economies have to do and know they should do to construct sustainable, high-skilled, post-net-zero economies for the twenty first century.”

As for the GCC international locations’ much less hawkish method to Russia, McGrade doesn’t see that as a hindrance to talks with the UK. “For 2 causes,” he mentioned. “There’s a better recognition of the strategic significance of the Gulf area, for the UK and for the West usually due to the warfare in Russia. Due to what which means for vitality costs and long-term vitality wants.

“The opposite level is that if the West goes to decouple from China, then it wants the Gulf. The Gulf states are properly positioned. They’re in a robust place economically.”

To make certain, McGrade mentioned, “the UK and Western governments usually all the time wrestle with some public opinion and campaigning teams at house on a few of the values agenda. They all the time fear about if that may be squared off with the wants of the strategic relationship with the Gulf. That may proceed to be a problem.”

Alluding to technical and political obstacles to reaching a commerce deal, he acknowledged that the 2 sides have totally different opinions on sure points however mentioned: “They don’t seem to be showstoppers. The deal is doable. It’s in all probability extra about political will in London. It will be a failure of political will if that deal isn’t accomplished.”

McGrade was forthright about his opinions on British voters’ choice to depart the EU three years in the past. “Fairly constant polling over time means that an ever-growing variety of the British public really feel that Brexit was a mistake and has introduced prices and really, only a few advantages,” he mentioned.

However, he mentioned, each the Conservative and Labour events have concluded that they can’t revisit the commerce deal in a elementary approach. “There’s a evaluation of the commerce deal on the five-year level, which is available in 2025,” he mentioned. “If Labour wins the election, they’ll wish to enhance the phrases of the commerce deal with out altering its elementary character.”

Quizzed about his private opinion on Brexit’s prices — a weakened pound, larger inflation, commerce and funding disruption, political uncertainty, lack of entry to the EU single market — McGrade mentioned it was clear that the downsides have been enormous and never simply financial.

“The hit to Britain’s status for political stability, which is form of the core of its gentle energy, has been in some methods even worse than the financial hit from lack of market entry,” he mentioned.