UAE And EU Engage In Talks On Comprehensive Economic Partnership Agreement To Boost Trade Relations

Dr. Thani bin Ahmed Al-Zeyoudi, the UAE's Minister of State for Foreign Trade, recently hosted Maroš Šefčovič, the EU Commissioner for Trade and Economic Security. Their discussions centred on the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and the EU. This agreement aims to strengthen economic ties by removing trade barriers and enhancing market access for goods and services.

The CEPA is expected to significantly boost trade relations between the UAE and the EU, which already accounts for 8.3% of the UAE's non-oil trade. In 2024, non-oil trade between these regions reached US$67.6 billion, a 3.6% increase from 2023. The agreement will further solidify the UAE's position as a global trade hub by improving access to the EU market, the world's second-largest economic bloc.

An investment roundtable was also part of Šefčovič's visit, involving key private sector representatives from both regions. The focus was on exploring new avenues for collaboration and investment flows between the EU and UAE. Discussions highlighted potential investments in sectors like AI data centres in France and energy projects in Italy.

Foreign direct investment (FDI) flows between the UAE and EU are robust, with recent collaborations in data centres in Italy, solar plants in Spain, and urban redevelopment in Budapest. A CEPA could unlock further opportunities, including a US$50 billion AI data centre deal with France and a US$40 billion commitment to Italy’s energy and defence sectors.

Al Zeyoudi emphasised CEPA's importance: "Our negotiations toward a UAE-EU Comprehensive Economic Partnership Agreement is of great importance to both the UAE and the EU and represents an extraordinary opportunity for us both to enhance trade and investment ties that will foster greater collaboration and create mutual benefits and prosperity." He highlighted how this partnership would bolster supply chains, drive innovation, and create jobs benefiting communities.

Maroš Šefčovič added: "Europe continues to be a reliable trading partner, which respects the deals it makes. And it is natural to seek to grow our relations with long-standing and trusted partners like the United Arab Emirates." He stressed that a bilateral FTA would unlock significant business opportunities for both European and Emirati businesses.

CEPA's Role in Economic Diversification

The CEPA programme is integral to the UAE's foreign trade strategy, reflecting its commitment to open, rules-based trade that drives economic growth. By enhancing global market access and establishing stronger trade flows with international partners, CEPA has contributed to record non-oil trade figures of US$816 billion in 2024—a 14.6% rise over 2023.

This agreement not only aims at boosting economic cooperation but also at fostering sustainable development through innovation-driven investments. With ongoing negotiations promising substantial benefits for both regions, CEPA stands as a testament to their shared vision of prosperity through collaboration.

With inputs from WAM