On 20 May 2026, the Cooperation Council for the Arab States of the Gulf (GCC) and the United Kingdom (UK) announced the successful conclusion of negotiations of a free trade agreement (FTA) between them.
With negotiations successfully concluded, both sides will now work together to finalise the legal text of the FTA, which will involve legal scrubbing before it can be signed.
This is the third FTA concluded by the GCC (the FTAs with Singapore and the European Free Trade Association entered into force on 1 September 2013 and 1 July 2014, respectively) and the first FTA the GCC has agreed with a G7 country. According to the UK Government, the GCC has committed to fully liberalise 90% of its tariff lines within 10 years of the entry into force of the FTA. On the other hand, the UK will be liberalising tariffs on all current GCC exports to the UK from day one under the FTA (with the exception of pork, chicken and eggs).
In 2025, the UK was the 15th largest destination for exports from the GCC while the UK was the fifth largest exporter to the GCC. Exports amounted to over USD 8 billion and mainly constituted of mineral fuels and oils. Imports from the UK into the GCC amounted to over USD 28 billion, more than doubling since 2022, and included stones, machinery and vehicles.
The FTA is comprehensive and goes beyond market access commitments or tariff concessions in trade in goods, with chapters spanning trade in services, customs facilitation, technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures, trade remedies, digital trade, investment protection, government procurement, intellectual property, competition and dispute settlement. Notable takeaways include the following:
A chapter on trade remedies that seeks to promote transparency and proportionality in the application of trade remedies, ensuring that such measures are both effective and justified. It will also establish a "bilateral safeguard mechanism", which will allow temporary safeguard measures to be applied to protect domestic industry from serious injury or threat of serious injury caused by increase in "preferential" imports under the FTA. Investigations to apply bilateral safeguard measures can be launched if significant increases in imports caused by tariff liberalisation threaten or inflict serious injury to domestic industries;
A comprehensive chapter on investment protection including fair and non-discriminatory treatment, protection against expropriation without compensation, and recourse to an investor-state dispute settlement (ISDS) mechanism to resolve disputes arising under the investment chapter. Whereas the UK bilateral investment treaties (BITs) with the Sultanate of Oman and the Kingdom of Bahrain will be terminated upon entry into force of the FTA, the UK-United Arab Emirates (UAE) BIT will continue to remain in place;
The digital trade chapter establishes prohibitions on "unjustified" data localisation requirements and protects against forced disclosure of source code or cryptographic information. It also enforces a permanent ban on customs duties for electronic transmissions;
The intellectual property (IP) chapter has entered commitments that go beyond the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) (TRIPS-plus commitments), including on patent term extensions for pharmaceuticals and exclusive use of pharmaceutical test data. A dedicated UK-GCC IP sub-committee will also be established under the FTA;
Under the government procurement chapter, the Kingdom of Bahrain and the UAE (both not parties to the World Trade Organization Agreement on Government Procurement) have undertaken legally binding commitments. UAE commitments include access to all procurement opportunities under a new national digital procurement platform, plus a legally binding right for UK suppliers to apply for "in-country value" certification, which can confer a competitive advantage of up to 25% in bid evaluations. The Kingdom of Bahrain's commitments include high-value contracts in transport and infrastructure, and a 10% price preference for UK SMEs established in Bahrain;
General exceptions will allow the UK and the GCC to take measures that would not otherwise conform with the commitments made in the FTA, to serve legitimate public policy objectives. The chapter will incorporate the general exceptions found within the WTO’s General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS), and a dedicated exception relating to national security; and
The Dispute Settlement chapter will establish a state-to-state dispute settlement mechanism for resolving disputes under covered provisions of the FTA.
Once the legal scrubbing of the FTA text is completed, both parties will begin the domestic ratification process of the FTA. The actual entry into force of the FTA will take place once both the UK and GCC member states have completed their ratification processes.
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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
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