The UAE and Australia have signed a comprehensive economic partnership agreement (Cepa) to enhance trade flow and boost investment between the two countries.
The deal will “create a range of opportunities for our respective businesses, investors and entrepreneurs”, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, wrote in a post on X.
“By removing or reducing tariffs, lifting barriers to trade and enhancing market access, we now have the potential to boost our trade threefold – from $4.23 billion in 2023 to $15 billion by 2032,” Dr Al Zeyoudi said.
After the signing, the UAE delegation also signed an investment protection agreement and five initial agreements aimed at accelerating capital flow into key sectors, including renewable energy, infrastructure, AI, mining and agriculture.
Bilateral non-oil trade between the countries reached $2.3 billion in the first half of 2024, an increase of 10 per cent compared to the same period last year, according to official figures
Australia exports many products to the UAE, including alumina, coal, steel, meat, dairy, oil seeds, seafood, canola seeds, nuts and honey. The agreement is also expected to cut Australian import tariffs on UAE-produced furniture, copper wire, glass containers and plastic.
The deal was signed by Dr Al Zeyoudi and Australian Minister of Trade and Tourism Don Farrell in Canberra. It was witnessed by Sheikh Abdullah bin Zayed, Deputy Prime Minister and Minister of Foreign Affairs and Australian Minister for Foreign Affairs Penny Wong.
On December 13 last year, Australia and the UAE announced the commencement of negotiations for the arrangement to boost economic ties.
The conclusion of negotiations on the Cepa was announced on September 17.
The UAE is Australia's largest trade and investment partner in the Middle East. With $9.43 billion in two-way goods and services trade last year (over $10 billion pre-Covid), according to the Australian government’s Department of Foreign Affairs and Trade website. The UAE is also Australia's 21st largest trading partner globally.
Goods and services exports to the UAE were worth $5.2 billion last year and were dominated by alumina, meat and oil seeds. Australian goods and services imports from the UAE were worth $4.7 billion last year and mainly consisted of petroleum products and urea.
Australia will export more than 99 per cent of its products to the UAE without tariffs under the deal. This will result in estimated savings of $135 million in the first year and $160 million a year once the agreement is fully introduced, Mr Farrell said in September when Cepa talks were concluded.
As of last year, the two countries have also committed a combined $14 billion to each other’s economies, with more than 300 Australian businesses operating in the UAE in construction, financial services, agriculture and education.
Last year, UAE investment in Australia was estimated at close to $12.7 billion according to Australian Bureau of Statistics data.
The UAE has been strengthening its trade ties with countries around the globe to boost non-oil foreign trade.
Last month, the UAE signed the agreement with Jordan, its first with a fellow Arab country to deepen trade ties between the countries. In September, the Emirates concluded Cepa talks with New Zealand and has also revealed plans to hold negotiations with Japan to finalise a pact.
The UAE aims to sign 26 Cepas, with deals reached already with India, Turkey, Indonesia, Cambodia, Georgia, South Korea, Chile and Mauritius. Talks are under way with other countries, including the Philippines. Cepas are expected to add about 2.6 per cent to the UAE's economy by 2030, Dr Al Zeyoudi said previously.
In the first half of this year, the country’s non-oil foreign trade hit a record Dh1.4 trillion ($381.21 billion), up 11.2 per cent on an annual basis amid a 25 per cent rise in non-oil exports on new Cepas, the UAE Government Media Office said in August. The country, as part of its national economic goals, is pursuing the target of Dh4 trillion in foreign trade by 2031.
The new Cepas are also supporting the UAE's economy, which is expected to grow 4 per cent this year, up from the previous estimate of 3.9 per cent in June, the latest report by the UAE Central Bank showed.
