The UAE and EU are seeking to secure the first free trade agreement between the bloc and a Gulf country this year following the conclusion of a fifth round of negotiations.
An agreement could be announced before the end of 2026, European and Emirati politicians and analysts have told The National – less than two years after talks were launched in April 2025.
Such a timeline would be a striking departure from the EU's typically protracted negotiations. In January, the bloc signed its biggest deal with India after nearly two decades of talks.
UAE Minister of State Lana Nusseibeh described the EU-UAE relationship as “very robust”. “But we are very ambitious for it to do more,” she added.
“We’re very focused on broad diversification of our trade relationships around the world – just as the EU is,” Ms Nusseibeh said. “Our ambition is to conclude a FTA [free trade agreement] with the EU this year: an ambitious new FTA that would create even further new avenues for co-operation between us and increase trade and investment flows.”
German MEP David McAllister, chairman of the committee of foreign affairs, said: “The European Union and its partners have acknowledged the volatility of open trade.
“Tariff threats and the unpredictability of the US administration have catalysed the need for diversifying trade relations.
“The swift application of an agreement would benefit businesses on both sides, providing security and predictability.”
In past months, senior EU leaders have explicitly laid out the bloc's strategic pivot towards markets outside the US and China.
Speaking at the World Economic Forum in Davos in January, European Commission President Ursula von der Leyen said efforts to seal trade agreements with the UAE, Thailand, the Philippines and Malaysia were examples of Europe “de-risking our economies and diversifying our supply chains”.
Aligning visions
A “new Europe” is emerging, Ms von der Leyen said. “Europe wants to do business with the growth centres of today and the economic powerhouses of this century,” she added.
This vision aligns with the UAE's strategy of seeking out new trade agreements in a bid to strengthen its position as a global logistics hub. Since 2022 – after the Covid-19 pandemic – it has signed 30 trade deals, including an agreement with India that involved a mere 88 days of negotiations.
Artificial intelligence, renewable energy and cybersecurity are among the main avenues of co-operation between the bloc and the UAE, officials said. The Emirates last year announced investments of tens of billions of euros in data centres in Italy and France.
The UAE is building on opportunities to diversify from fossil fuels, as is the EU, which aims to be climate neutral by 2050. In the UAE, the share of power generated by low-emissions sources grew to 35 per cent in 2024 – up from only 3 per cent in 2019 – driven by expansion in solar and nuclear capacity.
Technological innovation
“We see the UAE as a leading country in different fields such as renewable energy, green hydrogen and all the green technologies,” said MEP Reinhold Lopatka, chairman of the delegation for relations with the Arab Peninsula. Meanwhile, Europe hopes to export more industrial equipment to the UAE, including automotive components, pharmaceuticals and biomedical technologies, he said.
The UAE is already the EU's largest export destination and investment partner in the region, with bilateral trade in goods estimated at €57 billion ($67 billion). About 250,000 European citizens live in the UAE, the largest concentration anywhere in the Middle East.
A free trade agreement with the EU would give the UAE lower tariffs and simpler customs procedures, said Alberto Rizzi, a policy fellow at the European Council on Foreign Relations think tank.
“For now, trade to Europe is mostly fossil fuels and its derivatives but the idea would be to export a lot of other goods,” Mr Rizzi said. “For Europeans, it's interesting to be linked to a partner experimenting with a lot of technological innovation, including those related to green hydrogen, clean tech and carbon capture.”
The UAE also aims to highlight its location at the crossroads of the Middle East and Asia.
“We want to focus on delivering output for increased trade volume and productivity to benefit citizens in both markets, especially given our strategic position as a gateway to other trade routes and continents,” Ms Nusseibeh said.
Spring deal?
Meetings between the two sides have been “constructive and forward-looking”, EU Commission spokesman Olof Gill said.
The fifth round of talks took place in early February in Dubai. They covered trade in goods, customs, digital trade and government procurement. Negotiators plan to meet again in April in Brussels.
Mr McAllister, who is also vice president of the conservative European People's Party group in the European Parliament, said a fourth round of talks last year kick-started the latest negotiations.
“Identifying respective interests, discussing key sectors such as the digital economy, renewable energy and critical raw materials, as well as regulatory matters, were part of the discussions between the UAE and the EU,” he said.
A deal could be announced in the spring, with details hammered out in the following months, Mr Rizzi said. “It's still relatively doable, because both sides want to really push it.”
Others were more cautious. “The EU is not a speedboat. We are like a tanker,” said Mr Lopatka, who leads the Austrian delegation in the EPP group. He suggested a spring deadline was “too ambitious”.
“If they are not new obstacles, which I cannot see now, there is a chance maybe to finish it this year,” he added.
“What we want to have, when we have such an agreement, is strong protection for European investors. We want to have very clear regulation and we want to also to reduce unnecessary barriers.”
A free trade agreement with the UAE is viewed by many as a stepping stone towards a GCC-wide free trade deal. Talks began in 1990 but floundered in 2008. That was because of disagreements over its depth and level of ambition, Mr McAllister said.
An agreement with the UAE would constitute a “blueprint” for others in the region, Mr Rizzi said. “It would be the first one and also the one with the most significant economic value.”
