The recent UK referendum to leave the EU, or Brexit, as it is frequently known, represents shifting tides in many geopolitical arenas. This series is devoted to looking at the many possibilities that this could represent to the Middle East, in particular, and what it means for the stabilization of countries in that region.
Free skies agreement ends
Many of the wealthier countries in the Middle East, especially the Gulf countries of Kuwait, Bahrain, and Jordan, benefit from the free skies agreement in the European Union. London’s strategic significance as a major investment capital provided a major network of commerce that many nations from the region had been able to benefit from. Commerce increases with free movement, especially through the sky. Airlines in the gulf countries are now concerned because the UK’s exit from the EU means that this agreement will need to be renegotiated, and will certainly provide more restrictions that will suffocate business between connecting nations and London.
English real estate is attached to Gulf investors
England has a long history of working with Arab countries in the Persian Gulf region of the Middle East. Indeed, the existence of modern day states, such as Syria, Iraq, and Jordan, is due to the Arab revolt against the Ottoman Empire during WWI, which happened, in part, because of British support. Even today, the King of Jordan, Abdullah II, is half-British. Because of this history, there is a history of investment between these two regions, especially when it comes to real estate. Many high-end real estate projects in London happened because of investors from Jordan and Kuwait. Because of the looming restrictions on open commerce, it is likely that this economic line may be severed.
UK will need to strike new trade deals
As we stated in an earlier article, the UK is able to share in economic benefits that the EU gets as a unified economic player. Once the different parts of Article 50 begin to set in, the UK will need to entirely renegotiate many of the agreements that dictate how it exists in a global economy. This means that the current picture of UK trade will be entirely different. Of course, this means that many trade agreements with the Gulf countries will need to be renegotiated. However, these will likely be similar to what they are now. This does mean something bigger to other Middle Eastern countries, though. Because of the weight that the European Union carries as a trade partner, they were able to leave certain deals on the table because of various human rights violations in the Middle East. Deals that included goods from areas that were contested in conflict were left out, at the behest of the European Court of Justice. The UK, though, as a smaller trading partner than the EU, as a whole, would likely not be able to turn down these deals, in order to keep their trade in the positive. This could be a major setback to fighting human rights violations that are carried out throughout the Middle East.