In a significant development for international trade, Australian Trade Minister Don Farrell announced the completion of discussions regarding a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE). This groundbreaking deal, expected to be signed later this year, is projected to enhance Australian exports to the UAE by a remarkable $678 million.
Key Features of the CEPA
The new agreement will eliminate tariffs on more than 99 percent of Australian exports to the UAE, translating to an estimated annual savings of up to $160 million for exporters. The agreement will facilitate easier access for Australian goods, including meat, dairy products, steel, and alumina—crucial in aluminum smelting.
Additionally, the CEPA opens the UAE market to Australian service providers in critical sectors such as education, finance, and health, granting full foreign ownership rights. This is expected to further strengthen bilateral relations and business opportunities.
The agreement will also reduce Australian import tariffs on UAE-produced products, including furniture, copper wire, glass containers, and plastic, fostering a mutually beneficial trade environment.
Strengthening Trade Ties
The UAE stands as Australia’s largest trading partner in the Middle East, with two-way trade valued at approximately $10 billion in 2023. Recent data shows a recovery in trade links, with bilateral non-oil trade reaching $4.5 billion in 2022—an impressive 28 percent increase from the previous year.
Currently, more than 300 Australian businesses operate in the UAE, bolstered by an expatriate community of around 16,000 Australians. The new agreement is expected to stimulate investment, particularly in sectors critical to energy transition, such as renewable energy and mining. Notably, the UAE has recently invested $4.2 billion in a significant Australian urea project.
Future Prospects
Minister Farrell emphasized the strategic importance of this agreement, stating, “The UAE has some of the largest sovereign wealth funds in the world. A trade agreement with the UAE will facilitate investment, which is essential to achieving the Albanese government’s ambition of becoming a renewable energy superpower.”
Moreover, the CEPA will include a dedicated chapter on First Nations trade, providing Indigenous businesses with preferential market access, highlighting Australia’s commitment to inclusivity in trade.
However, the agreement has raised concerns regarding labor rights. The Australian Council of Trade Unions has voiced apprehensions about the potential impacts of the deal on labor standards.
Conclusion
As trade talks, which commenced in 2005 and faced a hiatus in 2009, have resumed and gained momentum, both nations remain optimistic about finalizing the agreement by the end of the year. The UAE has signed 11 agreements globally since launching its CEPA program in September 2021, aiming to boost the country’s non-oil foreign trade to AED 4 trillion by 2031.
With opportunities in logistics, food security, tourism, and clean energy, Australia is viewed as a vital partner by the UAE, paving the way for a prosperous future in international trade.
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