UAE, Georgia Sign CEPA Trade Agreement

October 12, 2023 by Middle East Briefing

Bilateral trade set to double in next five years as bilateral trade is boosted by the INSTC

The UAE and Georgia have signed a Comprehensive Economic Partnership Agreement (CEPA) between the UAE and Georgia, with aims to double non-oil trade from the current US$481 million to US$1.5 billion in five years.

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and Irakli Garibashvili, Prime Minister of Georgia, witnessed the signing of the deal. The move is a shrewd one as it has factored in, ahead of time, increasing trade connectivity via the INSTC routes that head from the UAE, bisect Iran via its Persian Gulf port at Bandar Abbas, to its Anzali port on the Caspian. From there goods can be shipped to Baku in Azerbaijan and west by rail to Tbilisi. Current bottlenecks are expected to be eased along the INSTC from early 2025.

Sheikh Mohammed bin Rashid Al Maktoum emphasised the UAE’s commitment to fostering economic growth and trade with friendly nations that share the same vision of building a prosperous future, stating that “The partnership with Georgia underlines the UAE’s dedication to stimulating international trade and supporting global economic stability in the face of current challenges.”

Irakli Garibashvili, Prime Minister of Georgia, expressed gratitude to Sheikh Mohammed bin Rashid and UAE President Sheikh Mohamed bin Zayed Al Nahyan for their significant contributions to enhancing bilateral cooperation. The CEPA is expected to accelerate capital flow into high-priority sectors, such as tourism, retail, logistics, and manufacturing, in both countries. It will remove or reduce tariffs on 95% of all product lines.

UAE, Georgia bilateral trade

The UAE and Georgia have been experiencing growing economic relations, with non-oil trade exceeding US$225 million in H1 2023, marking a 28% growth compared to H1 2022.

The total non-oil bilateral trade reached US$481 million in 2022, representing a 115% increase over the previous year. The UAE now accounts for over 63% of Georgia’s trade with Arab countries.

At present, the main products Georgia exports to the UAE are cars, liquor, and gold. It is of note that Chinese EV companies have begun making EV autos in Georgia. Georgia liquors include brandy style and fruit alcohols called Chacha, while Georgian food and wines are popular with the UAE’s increasing Russian diaspora. The main products that the UAE exports to Georgia are broadcasting equipment, rolled tobacco, and computers.

The UAE is also the sixth-largest global investor in Georgia, representing 5% of its total overseas foreign direct investment (FDI). The total bilateral investment between the two countries exceeded US$1 billion by the end of 2021.

The UAE-Georgia CEPA is part of the UAE’s global economic agreement programme, aiming to deepen trade and investment ties, stimulate growth in priority industries, create jobs, and streamline market access across the Middle East, Asia, and Europe for UAE and Georgian businesses. The agreement aligns with the UAE’s foreign trade agenda, which seeks to strengthen economic ties with strategic allies worldwide to accelerate economic recovery and secure vital supply chains.

The CEPA is expected to enter into force early next year following the ratification process on both sides.

Dezan Shira & Associates assist foreign investors into the UAE and maintain an office in Dubai. For assistance with UAE market entry, legal and tax advisory, and ongoing trade and compliance issues, please contact Maria Kotova at dubai@dezshira.com or see our 2023 Doing Business In Dubai guide below.