The UAE and Japan will start talks for a comprehensive economic partnership agreement (Cepa), as the Gulf country moves ahead with its plans to boost global trade ties.
Reaching a deal will help both countries support sustainable economic growth, UAE President Sheikh Mohamed said in a post on X on Wednesday. “Building on our long-standing history of strategic co-operation, the UAE and Japan today agreed to launch talks aimed at reaching a comprehensive economic partnership agreement,” he said.
“We look forward to strengthening our bilateral ties and exploring new opportunities that support sustainable economic growth for both countries.”
Concluding the Cepa with the UAE, as well as the Japan-GCC foreign trade agreement that is currently being negotiated in parallel, will “strengthen economic relations between the two countries”, Japan's Prime Minister Fumio Kishida separately said in a post on X on Wednesday.
The UAE is Japan's top trading partner in the Arab world in terms of exports and imports, with the Emirates receiving 40 per cent of Japan's exports to Arab countries, the UAE state-run news agency Wam reported. Meanwhile, Japan is among the UAE's top 10 trading partners globally.
Non-oil trade between the two countries in the first half of 2024 reached $8.1 billion, while the total trade for 2023 stood at $17.3 billion, marking a 17.4 per cent increase compared with 2022, according to Wam.
The launch of Cepa talks between the UAE and Japan is “a milestone in our foreign trade agenda”, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said on X.
“Japan is an industrial giant, a tech pioneer and a leader in advanced manufacturing, and with $8.1 billion in shared non-oil trade in H1 2024, the benefit of closer collaboration is clear,” the minister said.
A UAE-Japan Cepa would help reduce tariffs and stimulate new opportunities for sustainable growth in strategic sectors, which would establish new prospects for investment and allow more market access for businesses, the minister said.
“This is a deal of huge significance,” Dr Al Zeyoudi said.
In July, the International Monetary Fund said it expects Japan's economy to grow 0.7 per cent this year, after its gross domestic product expanded by 1.9 per cent last year, ranking it as the world's fourth largest. The IMF maintained its projection for the economy to grow 1 per cent in 2025.
In July, the UAE and Japan signed several preliminary agreements to enhance bilateral business ties and strategic partnerships during a visit by a UAE delegation led by Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, to Tokyo.
The planned start of discussions with Japan comes a day after the UAE and Australia concluded talks for a Cepa that is expected to boost trade and investment ties between the countries.
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 previously said.
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 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.
The country, as part of its national economic goals, is pursuing the aim of Dh4 trillion in foreign trade by 2031.
