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UAE-Georgia Cepa to enter into force in the first quarter of 2024

Goal is to double bilateral non-oil trade to reach $1.5 billion annually during next five years

The Comprehensive Economic Partnership Agreement (Cepa) signed between the UAE and Georgia will enter into force in the first quarter of 2024, aiming to increase the bilateral non-oil trade between the two countries to $1.5 billion in five years.

It is expected to usher in a new era of prosperity for several non-oil sectors like logistics, hospitality, agricultural sector, various business services and telecommunications among others.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, took to platform X to announce the signing of the historical trade deal between the two countries. He said: “Today, I and the Prime Minister of Georgia witnessed the signing of the Comprehensive Economic Partnership Agreement between the UAE and Georgia. Our goal is to double bilateral non-oil trade to reach $1.5 billion annually during the next five years. The UAE is Georgia’s largest trading partner in the Arab world and the sixth largest global investor in Georgia. It is the most active economy in building new bridges with countries of the world.”

This was revealed by ministers on both sides at a press conference on Tuesday in Dubai where market penetration both for the UAE and Georgia was high on the agenda, following the reduction or removal of tariffs.

Speaking to Khaleej Times on the sidelines of the event, Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade said, “The percentages of the tariff reduction has been significant which is about 95 per cent from their side while its 99 per cent given by us to Georgian products. This will bring in huge added value into our GDP.”

“Cepa will significantly expand our market opportunities for exports, with a minimum of $1.3 billion expected for our exports to Georgia within the next five years,” he added.

Al Zeyoudi stressed that the agreement would substantially enhance the UAE's export prospects, with a minimum anticipation of at least $1.3 billion in exports to Georgia over the next five years.

In 2022, bilateral non-oil trade was worth $468 million, representing an impressive 110 percent growth compared to 2021.

The UAE now accounts for more than 63 per cent of the total volume of Georgia’s trade with Arab countries, while its investments into Georgia represent 5 percent of its total FDI, making the UAE Georgia’s sixth-largest global investor.

In March, the UAE and Georgia finalised discussions regarding Cepa aimed at strengthening economic connections and increasing trade between the two countries.

The minister also highlighted that “when we you look at the best practices globally, it shows that countries manage to double their economies in a very short period because of the free trade agreements they sign.”

Speaking about the Georgian agreement, many sectors are going to benefit because of the huge percentage of liberalisation. Liberalisation will give market access to our companies to be treated like Georgian companies and vice versa. There's a huge potential when it comes to logistics, hospitality, and certain business services, financial telecommunications to benefit from the agreements on both sides,” Zeyoudi added.

Solar farm in Georgia in works with UAE collaboration

Both sides committed to enhancing their business ecosystems to attract FDI, foster innovation, and accelerate diversification, with the deal creating a platform for knowledge-sharing and joint ventures that will future-proof both economies and drive long-term, sustainable growth.

Levan Davitashvili, Vice Prime Minister and Minister of Economy and Sustainable Development of Georgia said: “We expect significant potential investments from the UAE into Georgia. For example, currently, we are working on renewable energy projects. There is a pilot project for a solar farm in Georgia. Hopefully, we will sign a joint venture agreement within the next month and move to the implementation phase. But we are not limited to this pilot project. We have a global ambitious agenda to invest more in renewable energy and energy is one of the priorities of the Georgian economy.”

He added: “This is an opportunity for UAE investors to explore opportunities in hydropower generation. But in the energy sector, we are not limited only to hydropower. This will be combined with solar and wind energy, onshore wind, which has also great potential and will be shared with our potential partners in the UAE.”

The UAE’s investment in Georgia accounts for 5 per cent of its overall foreign direct investment, ranking the Emirates as the sixth-largest global investor in the country.

Six more Cepas in the pipeline

Meanwhile, the UAE minister stated that the country is gearing up to finalize Comprehensive Economic Partnership Agreements (CEPAs) with six additional countries by the end of the year.

Al Zeyoudi highlighted: “Our priority is to have market access everywhere.”

He added, “We are about to conclude talks with South Korea, and Thailand is almost at the last stages. These agreements will follow those with Costa Rica, Chile, Colombia, and Vietnam. We are also very close to concluding talks with Ukraine.”