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3Novices:Brexit expected to boost Britain's ties with GCC

Abu Dhabi // Britain will place even greater emphasis on trade and defence ties with the Gulf as it moves towards an exit from the European Union, observers say.

Britain's departure from the bloc is expected to considerably reduce its influence in world affairs and the country faces uncertainty and economic volatility amid complicated negotiations with Brussels over the terms of the separation that could take two years at least.

"Any government during this period will want to reinforce its bilateral alliances and partnerships outside of the EU" and "that will very much include the GCC", said Sir John Jenkins, a former British ambassador to Saudi Arabia who is now executive director of the Middle East office of the International Institute for Strategic Studies in Bahrain.

"How this is done will depend to an extent on the medium-term financial impact of Brexit on the British economy, [the government's] policy responses to this and on any decisions [the government] makes to refresh its defence posture," Mr Jenkins said.

"I do not think this will lead to less engagement."

Increasing ties with the Gulf has been a major facet of foreign policy under Conservative prime minister David Cameron since 2010, with priority given to commerce. Mr Cameron championed increased trade with the GCC and significantly enhanced Britain's military role in what many described as a "return" to the Gulf, with a naval base under construction in Bahrain and plans announced in March for a permanent army base Oman.

The UK's annual trade with the UAE alone grew from £9 billion (Dh44.45bn) in 2010 to £13bn in 2013, with a target of £25bn by 2020, with a defence sales a key part of the economic relationship. Gulf sovereign wealth funds are major investors in British high-value assets, primarily property.

"As the volatility increases - and it will regardless of whether or not Brexit happens - the Gulf will become even more important to the UK as an offsetting factor," said Kristian Ulrichsen, a British expert on the GCC's international relations at Rice University's Baker Institute for Public Policy in Houston.

Tighter budgets in the Gulf as a result of falling oil prices will force Britain and the region's two other main western trade and defence partners - France and the US - to compete harder for contracts. The focus will be especially on Saudi Arabia, where plans for economic transformation offer lucrative opportunities for western companies.

Britain has the advantage of a relationship with Gulf states dating back more than two centuries during its colonial rule of the region. The long association has cemented personal relationships between Gulf rulers and Britain's royal family and built up its diplomatic corps' institutional capacity and knowledge of the region, Mr Ulrichsen said

Britain's ties with the UAE are "based on very strong historic relations", its ambassador Philip Parham told Dubai Eye radio this week.

Mr Parham also issued a statement after the Brexit vote saying the UK and UAE "will remain strong partners with key common security and prosperity interests. I am confident that our trade and investment ties will continue to grow."

British officials will "probably emphasise the soft aspects of British power, one of which of course is the royal family," Mr Ulrichsen said. "Britain has long relationships with Gulf ruling families and that is something that to some extent does distinguish the UK from its trading competitors."

While Washington enjoys very strong bureaucratic and military ties to Riyadh, the possibility of a more isolationist president in Donald Trump as well as increased tensions with the US could mean the personal relations with Britain could become more valuable, Mr Ulrichsen added.

The Gulf is one area of the Middle East that has few significant multilateral ties with the EU, with rulers preferring bilateral engagement with western partners, a preference that would benefit a UK freed of any policy coordination imperatives with the EU. The bloc has failed to clinch a free-trade agreement with the GCC that has been under negotiation since 1988, in large part because of EU demands on human rights and democratic reform.

An even stronger engagement with the GCC by Britain would also be aimed at demonstrating that it retains global influence despite leaving the EU and being inevitably diminished as an economic force, observers said.

Mr Parham stressed the UK's continuing importance as "a permanent member of the UN Security Council and a member of the G7, G20 and Nato", as well as its defence and aid spending.

"We continue to be the only member of those groups which spends both 2 per cent of GDP on defence and 0.7 per cent on development assistance," he said.

With a more aggressive Russia using the threat of its military might to challenge the EU-led status quo in Europe and the continent facing a heightened terror threat, Washington has pushed the bloc to take on more responsibility for its security. Dual EU and Nato summits planned for the coming days will feature the signing of a "landmark pact to confront a range of threats from Russia to the Mediterranean", according to Reuters.

But Britain has the largest military budget in the EU, and its exit, even if it continues to play a lesser role, will make these new defence plans harder to achieve as well as shift a greater share of the burden to Germany and France, decreasing their ability to focus on Gulf policy.

For the EU, "the ramifications of the vote will further undermine the already weak efforts to forge a common foreign and security policy", Mr Ulrichsen wrote this week.
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