We don’t need the long lens of history to state that the year 2021 will go down as one of the most pivotal in the history of the UAE. In the past 12 months, we celebrated our nation’s Golden Jubilee, welcomed the world to Expo 2020 — marking the opening of a new chapter in our story, revealed the Projects of the 50, an integrated package of economic and social initiatives that will define our path towards the UAE’s centenary in 2071. These steps further consolidated our status as a global hub for business, talent and innovation.
The many bold steps we took include a revised Companies Law that now allows for 100 per cent foreign ownership of companies in the UAE, the adoption of a new working week in line with the major economies of the world, revised employment and residency laws to create greater flexibility in the labour force, and our Net Zero commitment to reduce our carbon emissions by 2050 and unleash a new wave of innovation and efficiency.
These are all necessary to re-engineer our economy to not only meet the challenges of the future but also overcome the obstacles of the present. The era-defining impact of Covid-19 continues to be felt across the world, particularly on supply chains and the free, seamless flow of goods that the global manufacturing, construction and energy sectors, in particular, had taken for granted.
In the UAE, these challenges have been met with a whole-of-government response, both to set us on the path to recovery and also to rebuild a better, smarter and more resilient business ecosystem — one that is able to adapt to the new realities of a post-pandemic world.
The re-evaluation of our trade relationships is a key component of this strategic shift. A new trade policy was needed to increase the volume of goods and services moving in and out of the UAE, confirm our role in the facilitation of global trade, accelerate investment and joint-venture opportunities, and help attract all forms of capital — financial, technological and human.
Beginning in the summer, the government reached out to an initial list of eight nations, which between them, represent 26 per cent of the world’s population and 10 per cent of its gross domestic product, with a view of negotiating Comprehensive Economic Partnership Agreements and securing a $40 billion annual uplift in trade volumes. The response was overwhelmingly positive; not only were negotiations launched almost immediately with Indonesia, Israel and India, but we began to explore a host of opportunities with other, similarly forward-looking nations who understood the benefits of a broader, more integrated relationship with the UAE.
It is of considerable historical, cultural and economic significance that India, one of our oldest and most trusted allies, is the nation that will help us write the first chapter in this new era of growth, opportunity and exchange — one that marks a sea-change in both our bilateral relationship and global trade.
A new chapter in UAE-India relations
The direct rewards of the UAE-India Cepa are clear to both our nations, with the potential to boost bilateral trade by $100bn over the next five years. Thanks to tariff elimination on more than 80 per cent of goods, UAE exporters will have greater access to a market of almost 1.4 billion people. UAE companies will be better able to pursue opportunities in key industries such as hospitality, construction and professional services.
Our modelling shows that by 2030 it will add 1.7 per cent to UAE's GDP, an economic boost of $8.9bn. It will increase UAE exports by 1.5 per cent and improve import volumes by 3.8 per cent – worth an additional $14.3bn. The Cepa will also see 140,000 jobs created in priority sectors, which will help drive the competitiveness of the economy and accelerate innovation across the economy.
For India, they will gain improved access to an important market for manufacturing goods, digital technologies, industrial machinery, domestic appliances and precious metals and gemstones, and a frictionless gateway to rapidly growing economies in the Middle East, Africa and Europe. Together, we can continue to jointly explore opportunities in industrial capacity, infrastructure, energy and agriculture.
For the wider world, this is also a significant step towards the commitment expressed in the Leaders Declaration at the G20 Summit in November 2020. Trade, they concluded, is “now as important as ever” and the focus of governments around the world should be to “strive to realise the goal of a free, fair, inclusive, non-discriminatory, transparent, predictable, and stable trade and investment environment, and to keep our markets open”.
Our Cepa policy is the UAE’s contribution to this goal. As a long-standing trading nation, one whose heritage is deeply intertwined with the maritime routes that connected the East and the West, we understand the importance of sustainable, resilient supply chains, of trading systems that ensure level-playing fields, and of global markets that are open to developing nations and emerging enterprises.
Our deal with India, the world’s fifth-biggest economy and the second-most populous country, is the first of what will be a transformational network of agreements that will unlock a wealth of opportunity not just for our respective nations but for the region as a whole.
As the UAE looks to unlock the possibilities of a post-Covid future, the next 50 years of success begins here.
Abdulla bin Touq is UAE Minister of Economy