Other BriefingsUAE and Philippines Look To Increase US$1.9 Billion Non-Oil Trade Via a CEPA Agreement
The UAE and the Philippines are looking to boost US$1.9 billion non-oil trade ties as they negotiate details of a Comprehensive Economic Partnership Agreement (CEPA) between the two countries.
Dr. Thani bin Ahmed Al Zeyoudi, the UAE Minister of State for Foreign Trade, and Alfredo E. Pascual, the Philippines Secretary of Trade and Industry of the Department of Trade and Industry, have now finalised the scope of negotiations for a CEPA, ushering in a new era of trade and investment cooperation between the two nations. A joint statement has been signed between Al Zeyoudi and Pascual.
UAE-Philippines Trade Negotiations
The announcement is the latest milestone in the UAE’s CEPA programme, which aims to diversify and expand the country’s non-oil foreign trade relations. The CEPA will strengthen existing bilateral ties, which in the first half of 2023 saw non-oil trade increase to US$500 million, with growth of 19.4% compared to the same period in 2022.
Total non-oil trade between the two countries in 2022 reached US$1.9 billion, double the amount over the last two years.
The UAE is the Philippines’ second largest trade partner in the Middle East and Africa, accounting for approximately 30% of the Philippines’ total trade with the region. By the close of 2020, Philippines’ businesses had invested US$31.1 million into the UAE, while the total UAE direct investment into the Philippines reached US$11 million in 2021. Both are likely to increase. The UAE is looking to attract more Philippines labour, requiring administrative and other Filipino expatriate services. The Philippines also has a large Muslim population of about 8 million people, a potential market for Halal and related Islamic products.
Beyond lower tariffs and reduced barriers to trade, the UAE-Philippines CEPA is expected to drive capital flows even further by opening pathways for new investments and joint-ventures. It will also seek to create a platform for SME collaboration.
Regional Trade Benefits
GAFTA
There are additional trade benefits for businesses investing in the UAE and the Philippines. The UAE is a member of the GAFTA free trade bloc, which also includes, and provides additional access to markets in Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, and Yemen.
ASEAN Plus
For its part, the Philippines is a member of ASEAN, which also includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam. ASEAN also have Free Trade Agreements with Australia, New Zealand, Japan, South Korea, China and India.
Al Zeyoudi said: “The Philippines is a key strategic partner for the UAE and a high-growth economy in the heart of a rapidly growing region. The launch of preliminary CEPA negotiations reflects our shared desire for sustainable economic growth, a vision we agree can be realised by strengthening our economic ties. The CEPA will create new opportunities for our respective business communities, boosting investment and trade exchanges, expediting the flow of goods, and creating new joint investments and projects in priority sectors. I look forward to working with Pascal and his team to forge a deal that delivers real benefits for both sides.”
Pascual said: “I am most deeply honoured to mark the beginning of a greater and closer economic cooperation between our countries. With strong people-to-people ties and economic complementarities at its foundation, we are optimistic that the CEPA will result to mutual prosperity and sustainable development for the Philippines and the UAE.”
Progress made toward a UAE-Philippines CEPA follows the official state visit of senior United Arab Emirates government representatives to Manila in September, where the delegation, led by Al Zeyoudi and Ahmed bin Ali Al Sayegh, Minister of State, sought to deepen economic ties and accelerate private-sector collaboration in sectors of mutual interest.
Talks aimed at reaching an agreement between the UAE and the Philippines build on the UAE’s growing roster of CEPA partners, which today includes agreements with seven countries, spanning the Middle East, Southeast Asia, and Eastern Europe – encompassing nearly a quarter of the world’s population.
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