Bahrain's industry minister described the trade agreement between the U.K. and Gulf states as a "monumental achievement." Abdulla bin Adel Fakhro, Bahrain's minister of industry and commerce, said the free trade agreement, announced on Wednesday, was a win-win for both the U.K. and the Gulf Cooperation Council, and considered it "very significant."
He told CNBC's Dan Murphy that the size of the free trade agreement is very large, with significant bilateral trade and investment between the countries.
He expressed confidence that these areas of cooperation would grow because of the deal.
"We really consider it a monumental achievement; it is quite significant for both the GCC and the U.K," he added.
The agreement comes during a difficult time for the Gulf Cooperation Council, as the U.S.-Iran conflict has caused disruption in the region's oil and gas sectors, exports, and economies.
Regional ministers have emphasized that the GCC remains open to business, concerned that the ongoing conflict might discourage investors.
"The Iranian aggressions on the GCC were unprovoked and unacceptable and illegal, and the response of the GCC countries was very wise and very restrained, and focused on stability and continuing economic growth and even accelerating economic growth," Fakhro said.
"Today, the GCC as a bloc is significantly more united, stronger and more integrated and focused on areas that we need to strengthen, whether it’s industrial manufacturing, supply chains and the like ... than ever before," the minister added.
Mutually beneficial
The Gulf Cooperation Council includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, with a combined GDP of over $2 trillion and a population of more than 57 million.
The deal will reduce an estimated £580 million, or $780 million, in duties annually once it is fully implemented.
Of this amount, £360 million would be removed immediately upon the agreement's entry into force, according to the U.K.’s Department for Business and Trade.
Some tariffs on U.K. imports, such as those on cars, turbojets, aerospace parts, and food products like cheddar cheese and chocolate, will be removed right away.
Other tariffs, such as those on electric vehicles, will be phased out over a five or ten-year period.
Fakhro said the agreement is beneficial to the Gulf, with the U.K. recognized as a leader in fintech, services, and advanced manufacturing.
"We expect there will be a lot more collaboration in those industries," he said. He also mentioned that the Gulf’s petrochemicals industry would greatly benefit from the trade deal.
As the agreement was announced on Wednesday, the U.K. called it a "major win" and a "historic" agreement that could boost its economy by an estimated £3.7 billion ($4.9 billion) annually in the long term.
"The U.K. could see a boost to growth and higher wages for decades to come after becoming the first G7 country to secure a trade deal with the GCC today — strengthening our economic partnership with the region, supporting jobs in the long term, and bolstering domestic resilience," the U.K.’s Department for Business and Trade said at the time of the agreement's announcement.
The deal reflects the U.K.’s "solidarity and long-term cooperation with its Gulf partners," according to the British government.
The agreement is a welcome boost for British Prime Minister Keir Starmer, who faces challenges to his leadership, and as the U.K. economy faces pressure due to the Iran war.
"Today’s agreement is a huge win for British business, and for working people who will feel the benefits in the years ahead through higher wages and more opportunities," Starmer said of the deal.
"The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment," he added.
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