The UAE’s Comprehensive Economic Partnership Agreements agenda

The UAE has entered multiple bilateral Free Trade Agreements (FTA) with a range of sovereign states to enhance international trade ties and revenues between the various countries. The CEPAs aims to confer duty-free benefits on imported goods originating and traded between the UAE and individual CEPA countries, with certain key products benefiting under the treaty. The intention of the CEPA drive is for the UAE to expand its bilateral trade ties with “like-minded nations” in order to enhance its global competitiveness, increase foreign direct investment, continue to attract internationally sought human capital, and position the country as a global hub for business, investment and innovation.

The CEPA model has been described by the UAE Ministry of Economy as central to the UAE’s efforts to stimulate long-term, sustainable economic growth and cement the UAE’s position as a global centre for business. According to the UAE Ministry of Economy, CEPA has the potential to boost bilateral trade per individual CEPA country by USD 100 billion over the next five years.

The UAE’s broader trade strategy, seeking to double its economy by 2030, includes similar agreements with India, Israel, Indonesia, and Turkiye, with more negotiations underway.

The UAE aims to let the CEPA agenda benefit consumers, producers and companies alike by opening new markets for business, bringing better jobs and higher wages for people, and lowering prices for consumers. The CEPA agenda also aims to ensure access to global markets from the UAE through safe, secure and reliable supply chains, and to enhance the efficiency and sustainability of those supply chains. Therefore, each CEPA the UAE has signed reflects its commitment to building a resilient and diversified economy.

Below is a list of each CEPA signed by the UAE with a brief description of the CEPA

UAE and India CEPA

One of the most significant CEPAs the UAE has entered into is with India. Signed in 2021, this agreement aims to increase bilateral trade to $100 billion within five years. Key sectors include petrochemicals, textiles, gems and jewelry, and agricultural products. The CEPA with India is pivotal, considering the long-standing trade and cultural ties between the two nations. We have published a detailed article on the UAE – India CEPA and do reach out to learn more.

UAE and Indonesia CEPA

In 2022, the UAE signed a CEPA with Indonesia, Southeast Asia’s largest economy. This agreement covers a range of sectors, including energy, petrochemicals, ports, logistics, and tourism. It is expected to boost Indonesia’s exports to the UAE and attract UAE investments into Indonesia’s growing sectors like its digital economy and renewable energy sectors.

UAE and Israel CEPA

Following the Abraham Accords, the UAE and Israel entered into a CEPA to capitalize on the normalization of relations. This agreement, beyond just trade in goods and services, focuses on technology transfer, innovation collaborations, and joint ventures in high-tech industries.

UAE and Cambodia

The United Arab Emirates and Cambodia CEPA marks a significant step in enhancing trade and investment ties between the two countries. The CEPA aims to boost bilateral trade between the two countries by reducing tariffs, minimizing non-tariff barriers, and fostering trade in various sectors.

It builds on the already healthy economic relationship between the UAE and Cambodia, which saw a substantial increase in non-oil trade in recent years. The Cambodian economy, one of the fastest-growing in South-East Asia, is set to benefit from new export opportunities in areas like agriculture and food production, while the UAE will gain from exporting machinery, automotive parts, and exploring investment prospects in logistics, tourism, and renewable energy. The UAE highlighted the agreement as a key part of the UAE’s foreign trade strategy, and in bolstering ASEAN-Arab world connectivity and shared growth.

UAE and South Korea CEPA

The CEPA between the UAE and South Korea, focuses on technology, energy, and healthcare sectors. South Korea’s expertise in digital technology and the UAE’s strategic location and investment potential makes this a mutually beneficial partnership. This agreement marks a significant advancement in economic relations between the UAE, South Korea’s second-largest Arab trade partner, and South Korea, the UAE’s 11th-largest non-Arab Asian trading partner.

The CEPA coincides with a notable increase in trade between the countries, with non-oil bilateral trade hitting US$3 billion in the first half of 2023, a 21% rise from 2021. The CEPA is set to strengthen East-West supply chains, enhance two-way foreign direct investment (FDI), and promote collaborative research and knowledge exchange in sectors like energy, advanced manufacturing, technology, food security, healthcare, green economy, clean energy, tourism, space, intellectual property, and information and communication technology.

Future prospects

The UAE’s CEPAs serve as strategic tools for wider economic, technological, and cultural integration. Each CEPA is tailored to leverage the strengths of the UAE and its partner country, focusing on sustainable and future-oriented sectors.

Conclusion

Through these CEPAs, the UAE is positioning itself as a global economic hub. These agreements are crucial in the UAE’s quest for economic diversification, reducing reliance on oil, and building knowledge-based economies. Many benefits may be available to businesses engaged in international trade in the region, and for further details and inquiries, please feel free to contact us. Our dedicated team is available to provide you with comprehensive information and assist with any specific questions you may have.

Authored by: Zain Satardien, Aakriti Sharma