Abu Dhabi and Japan are set to “broaden” trade and investment ties with top executives from emirate congregating in the Japanese capital for the inaugural Abu Dhabi Investment Forum this week.
The four-day day visit by the Abu Dhabi delegation, which ends on Friday, comprises officials and top private sector executives. It will help the Arab world’s second-largest economy to expand its economic relationship with Tokyo to include sectors such as artificial intelligence, space technology, clean energy and advanced manufacturing.
“Japan has been a key partner of Abu Dhabi and the UAE for more than six decades, as evidenced by the steady growth of bilateral trade and mutual investments,” Ahmed Al Zaabi, chairman of Abu Dhabi Department of Economic Development, said.
“Our trade with Japan grew at a compound annual growth rate of 11.9 per cent in the past five years. Over the same period, the UAE’s non-oil exports to Japan increased at a CAGR [compound annual growth rate] of 8.8 per cent, and imports rose at a CAGR of 12.2 per cent.”
The UAE investments in Japan have also more than doubled over the past five years, and “our country attracted over 80 per cent of Japanese investments in the Middle East,” Mr Al Zaabi said.
The UAE is currently Japan’s top trading partner among the Gulf countries both in terms of imports and exports. Emirates receive 52 per cent of Japan’s exports to the Gulf region, state news agency Wam said in a recent report.
Total trade volume between the two countries including oil-related products reached about $49.6 billion in 2024, while non-oil trade amounted to about 17.5 billion, a 1.2 pre cent rise compared to 2023.
Clean energy, hydrogen, AI, life sciences are the sectors which Abu Dhabi aims to “deepen co-operation” with Japan, Mr Al Zaabi added.
The Abu Dhabi delegation visiting Japan includes top official from the Department of Culture and Tourism – Abu Dhabi, Abu Dhabi Securities Exchange, Abu Dhabi Global Market, Abu Dhabi Investment Office, Abu Dhabi Customs and Khalifa Fund for Enterprise Development.
Officials from Abu Dhabi Chamber of Commerce and Industry, Adnoc, Kezad, Hub71 and Abu Dhabi Airports will also be part of the delegation.
Officials and executives will visit and participate in key events in Japan, including Expo 2025 Osaka and SusHi Tech – Tokyo, and the eleventh Abu Dhabi Japan Economic Council meeting.
“We are going to Tokyo to do the Abu Dhabi Investment Forum, which will be one of the main forums for the Abu Dhabi Investment Authority to showcase all the investment opportunity in Abu Dhabi,” said Hareb Al Mheiri, executive director of the Abu Dhabi Residents Office, a division of the Abu Dhabi Department of Economic Development.
Mr Al Mheiri said Abu Dhabi has made it easier for international companies to set up in the emirate.
“We implemented the one-stop shop for investors to have all the knowledge they need,” he said.
“The most difficult challenge to invest outside the region is having the right information.”
As well as the Abu Dhabi Investment Forum, the emirate will also host the Abu Dhabi-Tokyo Business Forum.
Shihab Al Faheem, UAE ambassador to Japan, said: “Japan’s expertise in digital transformation, technology, sustainable mobility, and industrial automation complements Abu Dhabi’s strategic sectors and our shared vision for a knowledge-based, net-zero future.”
New areas of co-operation
AI and advanced technology is a sector that is set to benefit the most because “the UAE has a strong interest in it, and also Japan sees many opportunities by co-operating with the UAE,” Shigeto Kondo, senior researcher at the Institute of Energy Economics in Japan, told The National.
Space technology, as well as the healthcare sector, are the other areas where the two countries will look to bolster ties, Mr Kondo added.
“There is already a collaboration between two countries, like Japan is assisting the launch of the UAE satellites by using the Japanese satellite launching pad … probably such kind of framework of the co-operation could be expanded.”
The healthcare is also “one of the most promising areas,” for boosting co-operation with the UAE because of Japanese advancements in the sector especially in the manufacture of healthcare equipment.
The UAE, Japan energy co-operation is unlikely to change in the near term given Japan’s reliance on imports of oil but the two countries will be looking to expand their partnerships in new areas.
“Japan’s AI Strategy, announced in 2022, put a real emphasis on international collaboration – and the UAE is well-positioned to be a key partner,” Borko Handjiski, partner, government and public institutions at Oliver Wyman, said.
“Both countries are also committed to reaching net-zero emissions by 2050, so there’s a lot of room for joint work in areas like hydrogen, solar and battery technologies, nuclear, and carbon capture.”
The Emirates is stressing on the use of AI and has launched various initiatives following the unveiling of the UAE Strategy for AI in 2017.
The two countries are also co-operating in clean energy sector.
In 2023, Adnoc signed a deal with Japan’s Mitsubishi Heavy Industries to explore potential opportunities in green hydrogen and ammonia value chains.
The same year Masdar also announced a partnership with Mitsubishi Chemical Group and Japan’s Inpex to explore production of the world’s first commercial-scale polypropylene made from carbon-dioxide and green hydrogen in Abu Dhabi.
Cepa boost
The UAE and Japan are also holding talks to sign Comprehensive Economic Partnership Agreement to further bolster ties and the two sides are expected to conclude talks by the end of the year.
“A Cepa between the UAE and Japan would be a major catalyst for deeper economic ties,” Mr Handjiski said. “With Japan, a Cepa could open up even more targeted opportunities – particularly in AI, clean energy, and innovation-driven industries, which are strategic priorities for both sides.”
The UAE, which aims to boost trade and economic relations with countries around the globe, is working towards signing a total of 26 cepas, as it seeks to attract more investment and diversify its economy.
Tariff impact on economic ties
Economic relations between the UAE and Japan could be further bolstered amid continued trade tensions between the US and China, the world’s two large economies, according to analysts.
“If trade tensions between the US and China persist, Japanese businesses may start looking for alternative production hubs,” Mr Handjiski said.
“There could be a real opportunity for the UAE – especially in sectors where it already has a strong competitive edge, like logistics, advanced manufacturing, and clean tech.”
