The UAE and Australia have concluded talks for a comprehensive economic partnership agreement (Cepa) that is expected to boost trade and investment ties between the countries.
The Cepa will "streamline trade processes, eliminate tariffs on a wide range of goods and services, create new opportunities for investment, and encourage private-sector collaboration in priority sectors", the UAE's Ministry of Economy said on Tuesday.
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 implemented, Australian Minister of Trade and Tourism Don Farrell said.
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. That will make the products cheaper for consumers and businesses to purchase, resulting in savings worth $40 million annually.
"This Cepa will unlock significant opportunities for UAE businesses and provide Australian companies with a gateway to new markets across the Mena region," Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said.
The deal highlights the UAE's aim to expand "the reach of our trading network into key regions such as Asia-Pacific", he added.
Australia and the UAE are expected to sign the treaty later this year.
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.
Overall trade between the countries reached $9.9 billion in 2023, and the UAE is Australia’s largest trade and investment partner in the Middle East. Total investment between the countries is valued at $20.6 billion.
As of 2023, 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.
"The UAE has some of the largest sovereign wealth funds in the world,” Mr Farrell said. “A trade agreement with the UAE will facilitate investment, which is important to achieving the government's ambition of becoming a renewable energy superpower.”
Exports by the country are expected to increase by $678 million per year as part of the agreement and “this deal means more for Australia than just numbers", he added. "More trade means more higher-paying jobs, more opportunities for our businesses, greater investment to build things here in Australia, and cheaper bills for Australian households."
Cepas aim to reduce tariffs and remove bottlenecks that hamper trade with other countries. The UAE is aiming to sign 26 Cepas, with deals reached with India, Turkey, Israel, Indonesia, Cambodia, Georgia, South Korea, Chile and Mauritius. Talks are under way with Serbia, Vietnam, the Philippines, New Zealand, Ecuador and Morocco.
Overall, 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 surge in non-oil exports on new Cepas, the UAE Government Media office said last month.
The UAE’s non-oil exports to its top 10 trade partners grew by 28.7 per cent during the period, while with all the other nations it recorded a 12.6 per cent increase.
