The partnership between the Arab world's second largest economy and the world's 32nd-biggest economy will strengthen trade, enhance investment flows, remove unnecessary barriers to trade and create new business opportunities, the Philippines Department of Trade and Industry said on Tuesday.
At a bilateral meeting, Ahmed Ali Al Sayegh, UAE Minister of State, and Ramon Lopez, secretary of the Philippines Department of Trade and Industry, signed a joint statement announcing the intent to pursue the Cepa. After the bilateral meeting, Mr Lopez and Dr Thani Al Zeyoudi, UAE Minister for Foreign Trade, signed the joint statement formally announcing the intent to pursue Cepa.
“In pursuing a Cepa, the UAE and Philippines recognise the significant potential to deepen economic relations and deliver immense benefits to people in both nations through greater trade and investment,” Dr Al Zeyoudi said.
“This is another step forward in our vision to strengthen our economy and stimulate long-term, economic growth for the next 50 years, while also cementing our position as a trade and logistics gateway between Africa, Asia and Europe.”
The UAE, the commercial and trading centre of the Middle East, has maintained a strong trade momentum despite pandemic-induced headwinds. The Arab world’s second-largest economy has been strengthening its relationship with vital trading partners as the global economy and trading recovers.
The UAE launched trade negotiations with Georgia, South Korea, India, Indonesia, Israel and the UK last year.
The UAE is the Philippines’ biggest export partner in the Middle East. The total trade between the two countries grew by about 35 per cent to reach Dh3.5 billion ($951 million) in 2021 from Dh2.6bn ($705m) in 2020, according to the statement.
The Emirates also ranked as the 17th-top source of approved investments cumulatively valued at Dh48m into the Philippines in 2019, the statement said.
“These initiatives are expected to boost trade and investments between the two countries, leading to more diversified economic activities, development of new industries, employment generation and higher consumer spending as we partner for shared prosperity,” Mr Lopez said.
“The Philippines may serve as the UAE’s strategic hub for South-east Asia as economic activities continue to shift to Asia. Active engagement between government and business sectors is key in ensuring that both countries will maximise benefits of the agreements, including diversifying and expanding economic interests.”
The two countries also concluded negotiations for the Investment Promotion and Protection Agreement, the statement said.
This is “an opportune time for UAE investors” as the Philippines develops an investment landscape through “significant economic and regulatory reforms” such as the liberalisation of the Public Service Act, Retail Trade Law and Foreign Investments Act, among others, Mr Lopez said.
“These are supported by the Philippines’ efforts to improve ease of doing business by streamlining government processes, reducing processing time and cutting bureaucratic red tape,” he said.
During the Philippines’ country business briefing held at Expo 2020 Dubai, the nation welcomed letters of intent from GCC companies.
These are expected to reap Dh2.2bn worth of investment and generate 4,000 job opportunities in the country’s healthcare, energy, tourism and hospitality, and dairy industries, the statement said.
The UAE is undertaking comprehensive economic agreements with eight strategic global markets to achieve a Dh40bn annual increase in the current Dh257bn trade volume with these markets. A Higher Committee for Economic Agreements has also been established.
For instance, the Cepa between the UAE and India aims to boost the value of non-oil trade between the two nations to $100bn in five years.
India and Indonesia are also planning to sign a Cepa in the first quarter of this year, the country’s trade minister Muhammad Lutfi said in an interview last year. The two countries are planning to triple two-way trade in the next four years from $2.5bn in 2020.
Meanwhile, negotiations on the Cepa between the UAE and South Korea are expected to be finalised by the end of 2022. The 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, Dr Al Zeyoudi said.