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UAE rolls out two more Cepas in trade Dh4tr push

Latest free trade accords will remove or reduce tariffs on a vast array of goods

Published: Thu 31 Aug 2023, 8:22 PM

By
Issac John

Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade

Reinforcing its position as a key player in international trade and investment cooperation, the UAE on Thursday rolled out two strategic free trade agreements with Turkey and Indonesia.

The Comprehensive Economic Partnership Agreements (Cepa) with the two rapidly emerging economies are expected to give a pivotal fillip to the Arab World’s second-largest economy as it sets sights on an ambitious foreign trade target of Dh4 trillion and export goal of Dh800 billion by 2031.

The latest free trade accords, the third and fourth after the landmark Cepas inked with India and Israel, will remove or reduce tariffs on a vast array of goods, eliminate unnecessary barriers to trade, and establish pathways for investment into priority sectors such as logistics, energy, food production, fintech, e-commerce, as well as travel and tourism, the Ministry of economy said in a statement.

The UAE-Turkey Cepa aims to double bilateral non-oil trade to $40 billion within five years while the pact with Indonesia targets to push bilateral non-oil trade from the current $4.08 billion to over $10 billion within five years, and facilitate investment projects worth $10 billion in the same timeframe, said the MoE.

Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said the implementation of Cepas with Türkiye and Indonesia marks a significant step forward in the nation’s foreign trade programme. “Both agreements will unlock a range of opportunities for our private sector in two of the world’s most dynamic centers of growth, and help broaden our network of trade partnerships with strategically important markets – both regionally and globally.”

Al Zeyoudi said the agreements have been strategically crafted to invigorate and streamline the movement of non-oil trade, ensuring resilient supply chains and fostering opportunities for partnerships among the business communities in each partner country. “These agreements will act as catalysts for channeling investments into promising sectors including energy, logistics, tourism, the Islamic economy, agriculture, and more.”

The UAE-Indonesia Cepa, which was signed in Abu Dhabi in July 2022, also seeks to raise the combined value of trade in services between the two nations to $630 million by 2030. Under the terms of the agreement, more than 80 per cent of UAE exports to Indonesia will now be exempt from customs duties, the MOE said.

The UAE-Indonesian economic partnership also seeks to develop the rapidly expanding Islamic economy, which is projected to reach $3.2 trillion by 2024, while accelerating the implementation of investment projects worth $10 billion in sectors such as agriculture, energy, infrastructure, and logistics.

The UAE-Turkey Cepa has eliminated or reduced customs duties on 82 per cent of product lines, which account for more than 93 per cent of the value of bilateral non-oil trade. In 2022, Türkiye was the fastest growing of the UAE’s top ten trading partners, with non-oil trade climbing 40 per cent to $18.9 billion. The newly liberalised trading environment will see this rise to $40 billion within the next five years.

Al Zeyoudi said Cepas play a vital role in attaining the nation’s objectives, in particular the vision laid out in “We The UAE 2031,” which seeks to double the UAE’s non-oil foreign trade to Dh4 trillion and elevate national exports to Dh800 billion. The recently published statistics from H1, 2023, which show a record non-oil foreign trade value of Dh1.239 trillion for the first six months of the year, demonstrate that the UAE is firmly on track – and that the Cepa programme will help maintain this upward trajectory.