Global Britain and Kuwait:
An Integral Part of the UK’s GCC Free-Trade Strategy
By Matthew Robinson
THE UK-KUWAIT relationship is back on centre stage. While they have historically retained strong diplomatic ties, this year both countries have not only expressed the interest to build on their existing trade and investment relationship, but wholeheartedly demonstrated so. Kuwait was the UK’s 43rd largest trading partner in the four quarters to the end of Q1 2023 accounting for 0.3% of total UK trade. This is set to change.
The importance of the UK-Kuwait relationship was underscored by UK Foreign Secretary, James Cleverly, and Kuwait’s Foreign Minister, Sheikh Salem Abdullah Al-Jaber Al-Sabah, who held the inaugural UK-Kuwait Strategic Dialogue in London on 20 March 2023. They celebrated the (then) recent announcement that Kuwaiti nationals may travel visa-free using the UK’s Electronic Travel Authorisation (ETA) scheme from February 2024—a huge boost for business and tourism ties.(1) As a further sign of deepening relations, Kuwait’s Crown Prince Skeikh Mishal Al-Ahmad Al-Jaber Al-Sabah visited the UK at the end of August 2023 to mark the 70th anniversary of the establishment of the Kuwait Investment Office in London. He used the opportunity to meet with UK Prime Minister Rishi Sunak and finalise a memorandum of understanding (MOU) between Kuwait and the UK on an investment partnership. The deal was signed in Downing Street by UK Minister for Investment Lord Johnson and Kuwait’s Deputy Premier, Oil Minister, Minister for Economic and Investment Affairs Saad Al-Barak.
The UK is using its Global Britain foreign policy strategy to reprioritise the states of the Gulf Cooperation Council (GCC), with Kuwait as a key player. In trade terms this is not only geopolitically preferable for the UK, but an economic necessity. Now that the UK is outside the orbit of the European Single Market with heightened trade barriers in goods and services with its European Union (EU) continental neighbours, it needs to strengthen trade ties globally. In its March 2021 Integrated Review, (then) Prime Minister Boris Johnson forecast this prioritisation, “by 2030 […] we will have thriving relationships in […] the Gulf based on trade, green innovation and science and technology collaboration, in support of a more resilient region that is increasingly self-reliant in providing for its own security.”(2)
The statistical evidence also supports this ambition. Total trade in goods and services, including exports and imports, between the UK and Kuwait was £5.7 billion in the four quarters to the end of Q1 2023, an increase of 118.3% or £3.1 billion in current prices from the four quarters to the end of Q1 2022. Of this £5.7 billion: total UK exports to Kuwait amounted to £2.5 billion in the four quarters to the end of Q1 2023, an increase of 39.3% or £700 million in current prices, compared to the four quarters to the end of Q1 2022. Total UK imports from Kuwait amounted to £3.2 billion in the four quarters to the end of Q1 2023, an increase of 289.8% or £2.4 billion in current prices, compared to the four quarters to the end of Q1 2022.
While, predictably, refined oil accounts for nearly all Kuwait exports to the UK (97.9% or £3.0 billion), other goods, albeit in far smaller relative volumes, will surprise some. For instance, aircraft accounts for 0.2% (£5.9 million) and works of art 0.1% (£4.5 million) of Kuwaiti imports to the UK. In the other direction the UK export goods to Kuwait represent a more diversified mix, with cars top of the list at 25% (£161.3 million), and some other goods including medicinal and pharmaceutical products at 5.4% (£35.2 million) and tea, coffee and cocoa at 4.8% (£31.2 million).(3)
As it relates to prospects of a future comprehensive Free-Trade Agreement (FTA) between Kuwait and the UK, this would likely not take the form of a bilateral deal, rather one between the UK and the GCC as a bloc. On 14 September, Kuwait’s Minister of Commerce and Industry and Minister of State for Youth Affairs Mohammad Al-Aiban met with UK Minister for International Trade Nigel Huddleston and reiterated this point and discussed the future exploration of an FTA between the UK and the GCC. The meeting came during the 65th meeting of the GCC Trade Cooperation Committee in Oman. The UK and GCC are in their fourth round of negotiations for a free trade agreement, with the fifth round expected to be hosted by the GCC by the end of 2023.
While the fate of a future UK-GCC FTA is still in the air, the importance of consistent, high-quality and high-volume UK-Gulf trade and investment is not. With the total volume of trade between the UK and the GCC countries sharply increasing over the past year, Kuwait and its Gulf neighbours remain a pivotal part of the UK’s Global Britain strategy and integral ingredient to help fuel the UK economy at home.
(1) UK-Kuwait inaugural Strategic Dialogue 2023: joint communiqué, UK Foreign, Commonwealth and Development Office.
(2) Global Britain in a competitive age: The Integrated Review of Security, Defence, Development and Foreign Policy, HM Government.
(3) Trade and Investment Factsheets: Kuwait, UK Department for Business and Trade.
UK-Kuwait inaugural Strategic Dialogue 2023: joint communiqué, UK Foreign, Commonwealth and Development Office, March 2023
Trade and Investment Factsheets: Kuwait, UK Department for Business and Trade, September 2023
Global Britain in a competitive age: The Integrated Review of Security, Defence, Development and Foreign Policy, HM Government, March 20201