The UAE and South Korea agreed on Thursday to begin talks on expanding co-operation in priority areas from climate change mitigation to advanced technology to create new investment and trade opportunities.
Negotiations on the Comprehensive Economic Partnership Agreement (Cepa) are expected to begin within two months and to be finalised by the end of 2022, Thani Al Zeyoudi, the UAE Minister of State for Foreign Trade, said in Dubai on Thursday.
Cepa aims to provide a "mutually beneficial liberalisation of trade in goods, services and investment", the two countries said in a joint statement.
"There are many new areas of co-operation we are now pursuing that can provide opportunities for investment and growth – from Industry 4.0 technologies such as artificial intelligence and automation, to next-generation medicine, agri-tech and renewable energy," Mr Al Zeyoudi said.
The move is part of the UAE's drive to seek economic agreements with eight countries – including South Korea, India and the UK – as the global economy recovers and trade rebounds from the effects of the Covid-19 pandemic. The volume of trade between the UAE and South Korea reached more than $9.4 billion in 2020 and has grown to more than $2bn in the first six months of 2021, according to government data. Cepa will deepen the special strategic partnership between the two countries that began in March 2018 and boost their economic resilience, the joint statement said.
"Last year, the UAE was South Korea's largest trading partner in the Middle East," said Yeo Han-Koo, South Korea's Minister for Trade. He said this would be the first such agreement with a country in the Middle East, "that shows the special importance that we are putting into this Cepa".
Once finalised, the UAE-South Korea agreement will "open up each other's markets for goods and services, modernise the rules of trade and ultimately ... strengthen the economic competitiveness of our two countries", he said. "The Cepa will intensify future-oriented co-operation between our two countries."
The agreement will cover a joint response to climate change, including co-operation on renewable energy, developing green technology and reducing greenhouse gas emissions, the minister said.
Cepa will also cover digitalisation and advanced technologies, especially as applied in sectors such as logistics, pharmaceuticals, e-commerce, automation and AI, Mr Al Zeyoudi said.
"Today's talks represent the beginning of a process that will lead to stronger, deeper and broader trade and investment ties," Mr Al Zeyoudi said. "We believe removing trade barriers and supply chain bottlenecks, promoting the free movement of goods, accelerating foreign direct investment, attracting talent and empowering start-ups and entrepreneurs will benefit us both."
The comprehensive deal will tackle broad economic co-operation in investments, small-and-medium enterprises, sustainability as well as trade in goods and services.
The partnership agreement aims to boost the economic partnership between the two countries to a minimum of $20bn in the next three to five years, up from about $9bn currently, Mr Al Zeyoudi told The National on the sidelines of the conference.
"That is our ultimate goal. For sure it's not only about trade volumes, we want to make sure we're taking the investment to the next level," he said, citing partnerships in hydrogen, agri-business and renewable energy.
The UAE is also planning to start a similar process with Israel and Turkey next month.
"Both Israel and Turkey are coming next month, so we look forward to the delegation to come here and start the process," he said. "We're going to launch the process next month."