The United Kingdom on Wednesday announced a trade agreement with the Gulf Cooperation Council, becoming the first G7 nation to secure a pact with the six-country bloc.
According to the Department for Business and Trade, the accord is projected to add £3.7 billion ($4.9 billion) to the UK economy each year and to lift wages by £1.9 billion per year over the long term.
The Gulf Cooperation Council comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The deal is expected to eliminate an estimated £580 million in annual duties based on current UK exports to the region once fully implemented. Of that total, £360 million of tariff reductions will take effect immediately when the agreement comes into force.
Certain British food exports will be made tariff-free under the terms of the agreement. Specifically, cereals, cheddar cheese, chocolate and butter are listed among the goods that will no longer face tariffs.
"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," Prime Minister Keir Starmer said.
"The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment," Starmer added.
Officials highlighted the immediate tariff relief and the larger gains expected after full implementation as central features of the pact. The announcement notes explicit benefits for exporters of agricultural and processed food products through the removal of duties that currently apply to those shipments.
The release of the deal comes amid domestic political challenges for the prime minister. The announcement also arrives while the UK economy continues to experience pressure from the Iran war, a factor cited alongside the leadership context.
The formal entry-into-force date will determine when the initial £360 million of tariff reductions are applied, with full realization of the estimated £580 million in annual duty eliminations dependent on complete implementation of the agreement's provisions.