The UAE and Australia signed a Comprehensive Economic Partnership Agreement (CEPA), marking a new chapter in bilateral relations aimed at increasing trade, promoting private-sector collaboration, and facilitating investment flows.
H.H. Sheikh Abdullah bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Foreign Affairs, and Penny Wong, Australian Minister of Foreign Affairs, attended the signing ceremony which took place during Sheikh Abdullah’s working visit to Canberra. Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, and Don Farrell, Australian Minister for Trade and Tourism, signed the agreement.
CEPA to boost bilateral non-oil trade threefold
Once ratified, the CEPA with the UAE will be Australia’s first trade agreement with a country in the Middle East and North Africa region. Moreover, it represents an important addition to the UAE’s CEPA program. The deal will propel bilateral non-oil trade to over $15 billion by the year 2032, a threefold increase from $4.23 billion in 2023.
Commenting on the agreement, Sheikh Abdullah said the UAE-Australia CEPA was the latest milestone in a foreign trade policy that is reaping considerable rewards. In addition, it is a clear demonstration of the UAE’s desire to build bridges of cooperation and mutual benefit across the globe.
“Australia has long been an economic partner and trusted friend, with well-established links across trade, culture, and sport, and this agreement will deepen these bonds and create greater opportunity for our businesses to collaborate and grow,” he added.
Longstanding economic ties
The UAE-Australia CEPA builds on growing economic relations between the two countries, with bilateral non-oil trade reaching $2.3 billion in the first half of 2024, an increase of 10.1 percent from H1 of 2023.
The UAE is Australia’s leading trade partner in the Middle East and its 20th largest partner globally. 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 sectors such as construction, financial services, agriculture, and education.
Notably, this CEPA features dedicated chapters to enhance cooperation between the UAE and Australia in areas such as environment, women empowerment, sustainable agriculture and food systems, and animal welfare.
Six agreements in key sectors
In addition to the CEPA, the UAE and Australia signed six agreements during the high-level UAE delegation’s visit to Australia, further strengthening the partnership between the two nations.
These included an agreement to promote and protect investments between the UAE and Australia, and five investment cooperation memoranda of understanding (MoUs) to facilitate and promote two-way investment in sectors of national priority, including green and renewable energy, infrastructure and development, data centers and artificial intelligence projects, minerals and mining, and food and agriculture.
The UAE’s CEPA program is a key pillar of the nation’s growth strategy. It targets $1 trillion in total trade value by 2031 and aims to double the size of the wider economy to surpass $800 billion by 2030. To date, agreements implemented in the program, which was launched in September 2021, span the Middle East, Africa, Southeast Asia, South America, and Eastern Europe and encompass almost a quarter of the world’s population.
Read: Ras Al Khaimah, U.K. Government strengthen partnerships across key trade, investment sectors
CEPA to save $135 million in tariffs during the first year
When the UAE and Australia concluded CEPA negotiations, Farrell noted that the agreement seeks to cut over 99 percent of tariffs on Australian products entering the UAE, and save around $135 million in tariffs during only the first year and $160 million per year once the agreement is fully in place.
“This trade agreement provides a gateway for Australian exporters to diversify into the Middle East, a market of around 58 million consumers and a combined GDP of A$1.4 trillion,” the tourism ministry’s statement added.
The agreement will also cut Australian import tariffs on the UAE’s furniture, copper wire, glass containers, and plastic imports. This will make UAE products in Australia cheaper, further lowering business costs for traders. This will save Australian households and businesses around $40 million a year, added the minister.
The CEPA unlocks new business opportunities, creates greater certainty for Australian service providers in the UAE, and makes it easier for certain skilled professionals to work temporarily in the UAE.
“Under this trade agreement, Aussie exports are expected to increase by $678 million per year, but this deal means more for Australia than just numbers. 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,” added Farrell.
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