Global Britain needs stronger trade with the Middle East, but not at any price

Damien Phillips

June 2, 2021

Last month’s Queen’s Speech saw the government set out its plans to foster thriving relationships in the Middle East based on “trade, green innovation and science” as part of a wider global drive for stronger alliances and partnerships. Trade with the Middle East is a strategic priority for Britain and we can use it as a lever to force change on unscrupulous regimes in the region.

Post-pandemic Britain needs to tap into growth markets like the Middle East to create wealth and jobs here at home. The region is a coiled spring of economic energy that could be vital to our recovery. It has one of the youngest and fastest-growing populations in the world, expected to reach 580 million people by 2030. It boasts the largest repository of oil and gas, has four of the ten most significant sovereign wealth funds, and three of the highest GDP-per-capita nations on the planet.

In the Gulf alone, the capacity for investment in the UK and in their own productive capacity is colossal. Gulf economies hold a staggering $43 trillion in liquid and quasi-liquid assets. The Gulf States represent the UK’s fourth-largest trading partner, with trade in goods and services worth around £45 billion.

Even this is a paltry figure compared with the Gulf’s latent capacity for trade with the UK. The EU has been trying and failing for 21 years to sign a free trade deal with the Gulf. As Trade Secretary Liz Truss has already shown, Brexit Britain can do a hell of a lot better than this.

But such deals must be cleverly negotiated. Several professed ‘friends’ in the region are acting against our interests and any agreement with them must have strings attached. The United Arab Emirates (UAE) for instance, is ostensibly one of the Britain’s closest allies in the Gulf, part of a Saudi-led coalition of Gulf States intended to check the power of Iran’s theocratic regime.

And yet in recent months, it was revealed that the UAE had been working with Venezuela to get around Western sanctions, assisting the brutal Maduro regime in funding the repression and murder of over 9000 people for resisting his government. UAE firms helped Maduro to obtain nearly $1.21 billion through gold sales in their country and three UAE-based companies were found to be the leading buyers of Venezuelan crude oil, in defiance of our efforts to prevent him sponsoring his dictatorship through international markets.

Late last year, the UAE was identified as a financier of Russian mercenaries acting on behalf of Vladimir Putin in waging a proxy war in Libya against its legitimate, UN-backed government. With its support for the military dictatorship in Egypt, and its deepening diplomatic and economic ties with both Russia and China, these are worrying signs that the UAE may soon be joining Saudi Arabia as an “ally from hell”.

However, such oil-dependent states are under significant pressure to diversify their economies and their growing private sectors need access to the British market. This provides us with serious leverage. Provided we don’t repeat Theresa May’s disastrous desperation to sign a deal at any price, we can use trade deals with them as a bargaining chip to force change.

In this way, we can chivvy problem states into quitting destructive power plays without damaging, virtue-signalling boycotts that would hurt our consumers at home. This would be more effective than any amount of hectoring or threats could ever achieve, cementing Britain’s position as the world’s leading soft-power superpower and spreading our values across the globe.

Author

Written by Damien Phillips

Damien Phillips is a Fellow of The Cobden Centre, and a specialist in international affairs and political economy.

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