The UAE’s Comprehensive Economic Partnership Agreements (Cepa) with Turkey and Indonesia have come into force and will begin a new era of trade and investment co-operation with the rapidly growing emerging global economies.
The trade pacts with both nations will “remove or reduce tariffs” on a range of goods and eliminate unnecessary barriers to trade, the Ministry of Economy said in a statement on Thursday.
The agreement will also open new avenues of investment in the UAE’s priority sectors including logistics, energy, food production, FinTech and e-commerce, as well as the travel and tourism sector.
“The implementation of our … agreements with Turkey and Indonesia marks a significant step forward in our foreign trade programme,” Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said.
"Both agreements will unlock a range of opportunities for our private sector in two of the world’s most dynamic centres of growth and help broaden our network of trade partnerships with strategically important markets – both regionally and globally."
The agreements have been “strategically crafted to invigorate and streamline the movement of non-oil trade” and will strengthen supply chains, the minister added.
The deals are the third and fourth of the UAE’s Cepas to come into force, following on from the pact with India, which was implemented in May 2022, and Israel, introduced in April this year.
“They are the latest components of a foreign trade agenda that seeks to establish stronger economic ties with strategically important nations around the world,” the ministry said.
The UAE-Indonesia Cepa, signed in Abu Dhabi in July last year, is projected to boost the value of bilateral non-oil trade from its current $4.08 billion to more than $10 billion within five years of implementation.
The agreement also seeks to raise the combined value of trade in services between the two nations to $630 million by 2030. More than 80 per cent of UAE exports to Indonesia will now be exempt from customs duties.
The UAE-Turkey deal eliminates or reduces customs duties on 82 per cent of product lines, which account for more than 93 per cent of the value of bilateral non-oil trade.
In 2022, Turkey was the fastest-growing of the UAE’s top-10 trading partners, with non-oil trade climbing 40 per cent to $18.9 billion.
With the implementation of Cepa, the UAE expects its trade with Turkey to $40 billion within the next five years.
Boosting trade is one of the central planks of the UAE’s economic transformation agenda. The Arab world’s second-largest economy aims to sign 26 Cepas as it seeks broaden its investment horizon globally and boost its foreign trade to Dh4 trillion ($1.09 trillion) by 2031.
The UAE's non-oil foreign trade hit a record Dh1.24 trillion in the first half of 2023, up 14.4 per cent year on year. Non-oil exports with its top 10 most important trading partners rose by 22 per cent in the first six months of this year, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said on Wednesday.
“Our non-oil foreign trade will exceed Dh2.5 trillion this year … and we will achieve the target we announced of Dh4 trillion by 2031,” he said on X, formerly known as Twitter.
“Intra-regional trade with Turkey, for example, grew 87 per cent in just one year, indicating the effectiveness of our balanced, proactive and positive foreign policies.”
Overall, non-oil exports grew by 11.9 per cent annually to Dh205 billion in the first six months of the year, which was more than the full-year levels recorded in 2017, Dr Al Zeyoudi said on Wednesday.
Trade is also set to receive a boost after the Brics bloc – comprising Brazil, Russia, India, China and South Africa – invited the UAE as well as Saudi Arabia, Egypt, Iran, Ethiopia and Argentina to join the group this month.