Other BriefingsBusiness Opportunities Under UAE-Vietnam CEPA Deal
The signing of the Comprehensive Economic Partnership Agreement (CEPA) between the United Arab Emirates (UAE) and Vietnam marks a transformative milestone in the economic relations between the two nations. Signed during Prime Minister Pham Minh Chinh’s official visit to the UAE in October this year, this agreement is a forward-looking framework designed to enhance bilateral trade, investment, and economic cooperation across diverse sectors.
The Comprehensive Economic Partnership Agreement between the UAE and Vietnam aligns with the UAE leadership’s vision of enhancing communication and cooperation and expanding global partnerships. It contributes to economic diversification and growth, expanding the UAE’s network of trade and investment partners worldwide. This agreement also enhances the access of UAE industrial exports to Vietnam and ASEAN countries, which consist of 10 nations, supporting the goals of the National Strategy for Industry and Advanced Technology, Operation 300bn. – Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology
READ MORE: Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA): Key Details
A landmark in bilateral trade relations
The UAE-Vietnam CEPA comprises 18 chapters covering trade, investment, intellectual property, technical barriers, and more. With commitments to eliminate tariffs on nearly all exports from both nations—99 percent of Vietnamese exports and 98.5 percent of UAE exports—this agreement creates a level playing field and significantly enhances market access.
Vietnam’s rapid economic growth, projected to maintain a robust 6 percent annual increase from 2025, and its US$470 billion GDP make it a prime partner for the UAE. Conversely, the UAE’s goal to achieve AED 4 trillion in non-oil trade by 2031 dovetails seamlessly with Vietnam’s industrialization and export growth strategies.
Trade growth and key opportunities
The agreement amplifies Vietnam’s access to the Middle East while bolstering UAE’s trade footprint in Southeast Asia. In the first half of 2024 alone, non-oil bilateral trade surged by 8.7 percent year-on-year to US$6.1 billion. Vietnam’s exports, including mobile phones, agriculture, seafood, and textiles, now have a broader entry into the UAE market. Concurrently, UAE exports of plastics, petroleum products, and metals gain competitive leverage in Vietnam.
This strategic alignment is poised to elevate the UAE’s goal of achieving AED 4 trillion in non-oil foreign trade by 2031 while reinforcing Vietnam’s trajectory as ASEAN’s fastest-growing economy, with GDP growth projected at 6 percent annually.
Sectoral opportunities and key drivers
Renewable energy and infrastructure
With Vietnam producing 69 percent of the ASEAN region’s total solar and wind energy in 2023, the renewable energy sector presents immense opportunities for UAE expertise and investments. UAE companies can contribute to Vietnam’s energy transition through investments in cutting-edge technology, infrastructure, and financing solutions, thus reinforcing long-term development goals.
Agriculture and food security
Vietnam’s robust agricultural sector, including exports of rice, cashews, coconuts, spices, and seafood, complements the UAE’s ambition to address global food security challenges. The CEPA facilitates smoother supply chains and fosters collaborations in sustainable agriculture, ensuring both nations benefit from stable food supplies amid global disruptions.
READ MORE: Vietnam’s Strategic Push into the Middle East Halal Market
Trade and logistics
Vietnam is the UAE’s largest non-oil trading partner in ASEAN, with non-oil bilateral trade reaching US$6.1 billion in the first half of 2024, an 8.7 percent increase year-on-year. The CEPA’s tariff reductions will further enhance trade in key sectors such as machinery, textiles, metals, and plastics. Additionally, collaboration in logistics and supply chain optimization can address the rising demand for efficient trade routes between the Middle East and Southeast Asia.
Industrial and technological advancement
Under the UAE’s Operation 300bn initiative, this agreement enhances the export potential of UAE-manufactured goods to Vietnam and other ASEAN countries. The CEPA also encourages the transfer of advanced technologies, fostering innovation in sectors like manufacturing, engineering, and digital transformation in Vietnam.
Tourism and financial services
The agreement includes provisions for economic cooperation in tourism, financial services, and transportation. This opens doors for UAE-based firms to invest in Vietnam’s burgeoning tourism infrastructure while leveraging Vietnam’s strategic location as a gateway to Southeast Asia.
Environmental and climate collaboration
The partnership between Vietnam and the UAE also emphasizes sustainability. The two nations aim to co-develop strategies to mitigate climate change, optimize resources, and promote clean energy initiatives. By leveraging Vietnam’s natural resources and the UAE’s technological advancements, both countries can lead regional sustainability efforts.
Business implications and prospects
Vietnam’s competitive edge
Vietnam’s exports, ranging from mobile phones and electronics to textiles and seafood, are set to gain a competitive edge in the UAE market. The CEPA ensures Vietnamese products benefit from tariff eliminations and simplified customs procedures, enhancing their attractiveness compared to regional competitors.
Opportunities for UAE investors
The UAE’s strategic vision to expand its investment portfolio aligns well with Vietnam’s growing sectors such as logistics, renewable energy, and advanced manufacturing. By identifying growth-focused opportunities, UAE investors can tap into Vietnam’s dynamic economy and its strategic location in the heart of ASEAN.
Strengthening ASEAN connections
The UAE-Vietnam CEPA serves as a gateway for the UAE to strengthen ties with the broader ASEAN region. Enhanced connectivity between Vietnam and the UAE will facilitate trade with other ASEAN members, leveraging Vietnam’s role as a bridge between the Middle East and Southeast Asia.
Conclusion
The UAE-Vietnam CEPA is not just a trade agreement but a transformative partnership that leverages the economic strengths of two dynamic economies. For Vietnam, it offers unprecedented market access and a pathway to greater economic integration with the Middle East. For the UAE, it provides opportunities to diversify its economy, expand its non-oil trade portfolio, and establish itself as a key player in ASEAN’s growth narrative.
As the CEPA takes effect, businesses in both countries must act swiftly to capitalize on the new opportunities it presents. With the right strategies, the UAE and Vietnam can achieve mutual economic prosperity, setting a benchmark for future international trade agreements.
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