WITH NEWS last week that Saudi Arabia favours New York over London for the listing of oil giant Saudi Aramco, there is growing cause for concern that Britain is losing grip on post-Brexit opportunities in the strategically important Arabian Gulf.
The timetable for the Aramco listing is 2018, meaning a decision on which stock exchange and global financial city will host the world’s largest ever IPO is likely to be announced before the end of this year. Time is running out for London to out-play New York and win a listing that will create wealth and sustain jobs across various parts of the City.
The Aramco listing is the jewel in the crown of the new relationship with Saudi Arabia and its new leadership. The desert Kingdom, like the UK, is also undergoing a radical transformation with the roll-out of a 2030 Vision and 2020 National Transformation Program. As Britain embarks on a new journey to build prosperity through reinvigorated trade relations beyond the EU, Saudi Arabia is on a journey to diversify away from reliance on energy exports through a vibrant private sector and smaller State.
Looking beyond the Aramco listing, there are other opportunities that will increase volume of goods that the UK currently exports to Saudi Arabia. Expanding our exports to Saudi Arabia and the other five Gulf countries will become easier with signing of a UK-Gulf Cooperation Council (GCC) free trade agreement.
Secretary of State for International Trade, Liam Fox has correctly identified the strategic importance of this opportunity and has targeted 31 big-ticket exporting opportunities spanning hydrocarbons, defence, infrastructure, science and the creative industries. Britain's involvement in these opportunities could see the £30 billion worth of goods and services that the UK exports to the GCC nations every year rise significantly. To put these trade figures into perspective, only the US, Germany and Switzerland are larger export markets for Britain.
The eventual signing of a FTA with the GCC would send a positive message not just within the UK, but to the EU which has failed to conclude a similar deal despite 20 years of negotiations. A deal would demonstrate the seriousness of the UK’s global trade ambitions to other possible partners.
For Britain to succeed where the EU has failed will require a determined commitment to building diplomatic and business relations, and not losing sight of the end goal. The government must be aware that the Middle East is an unstable region with non-Western values, and it should not be derailed by the inevitable hurdles along the way. It should be recognised that trade is not just a source of prosperity but a way to open up societies and change attitudes. For those that wish to cite human rights concerns and have a neoconservative disposition to change societies that don't share Western values then they should recognise that trade is a force for good in that it provides communication into the West and opens up peoples' minds.
A good starting point to re-boot trade discussions with the GCC will be at the end of the year when the UK is set to host the GCC leaders in London. It is the first time that such a meeting is hosted outside of the Gulf states, and is a clear statement of their desire to trade with Britain outside of the EU. Gulf nations and companies must have no doubts that Britain is not only open for business, but that UK plc is uniquely qualified to help with their economic transitions.
Britain must not miss this opportunity, and should extend the warmest of welcomes. The consequences of not fulfilling our potential in the Gulf would be damaging to the entire process of departure from the EU when we should be looking to build positive steps to more free trade agreements.