Other BriefingsUAE, Turkiye, Sign Closer Economic Partnership Agreement
The United Arab Emirates (UAE) and Turkiye have signed a Comprehensive Economic Partnership Agreement (CEPA) that aims to take economic relations between the two countries to a new phase and increase bilateral trade to around US$40 billion (TL756.8 billion) in the next five years.
The negotiations on the deal began last year following UAE President Sheikh Mohamed bin Zayed Al Nahyan’s visit to Turkiye in 2021, during which the UAE set up a US$10 billion bilateral investment fund.
“The agreement constitutes a milestone in the two countries’ qualitative relations and a new era in cooperation toward broader horizons for the benefit of the two countries,” UAE ambassador to Türkiye, Saeed Thani Hareb Al Dhaheri stated. He said relations between Abu Dhabi and Ankara date back to decades of constructive cooperation.
“This month marks the 50th anniversary of diplomatic relations between the two nations,” Al Dhaheri said. “The process of cooperation relations culminated with the signing of the Comprehensive Economic Partnership Agreement.”
The Emirati diplomat said the partnership agreement reflects the keenness of the UAE and Türkiye to expand their cooperation. “The agreement will stimulate trade and investment exchange and joint economic growth and enhance the quality of life for the two friendly peoples,” he said.
“It will also establish a real development partnership, build common interests, and consolidate stronger strategic relations between the two countries,” he added.
The UAE envoy noted that the partnership agreement “will contribute to launching a new path of joint growth and mutual opportunities.”
The CEPA deal will eliminate or reduce customs duties between the UAE and Turkiye on 82% of goods and products, accounting for over 93% of non-oil trade.
Non-oil exchanges between the two countries reached nearly US$19 billion last year, up 40% on the previous year. Türkiye is now the UAE’s sixth-largest trading partner for non-oil trade.
According to Al Dhaheri, the agreement will provide over 100,000 jobs in Türkiye and about 25,000 in the UAE. “It will facilitate and accelerate the process of trade exchange between the two countries. This agreement will also open new markets for exporters from both countries. It will benefit the owners of large and small projects simultaneously.”
Ratification of the deal is expected in the second quarter of 2023, with implementation to follow soon after. The CEPA is expected to focus on strategic sectors such as agritech, food security, clean energy, and continued cooperation on construction and real estate projects.
There are other opportunities for UAE and Turkish businesses for trading with and establishing a presence in each others countries. The UAE is a member of the Gulf Cooperation Council (GCC) which also includes free trade with Bahrain, Kuwait, Oman, Saudi Arabia and Qatar, while the GCC also has trade agreements with India, New Zealand, Singapore, and EFTA countries. Negotiations are currently underway with several countries and trade groups, including the European Union, Japan, China, Korea, Australia, Pakistan, and the Mercosur member countries (Argentina, Brazil, Paraguay and Uruguay). These existing agreements are especially useful for Turkish businesses wanting to access the Gulf consumer markets.
Turkiye meanwhile has free trade agreements with Albania, Azerbaijan, Bosnia & Herzegovina, Chile, Egypt, Georgia, Israel, Kosovo, Lebanon, Malaysia, Mauritius, Moldova, Montenegro, Morocco, North Macedonia, Palestine, Serbia, Singapore, South Korea, Sudan, Tunisia, Ukraine and the UK. These are especially useful for UAE exporters wanting to access markets in North Africa, the Caucasus and Balkan regions of Europe, and South Asia.
Dezan Shira & Associates can advise UAE and Turkish exporters as to the contents of the CEPA agreement and provide market analysis in each, in addition to providing advise on trade structuring and corporate establishment in both countries. Please contact dubai@dezshira.com for assistance
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Middle East Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Dubai (UAE), China, India, Vietnam, Singapore, Indonesia, Italy, Germany, and USA. We also have partner firms in Malaysia, Bangladesh, the Philippines, Thailand, and Australia.
For support with establishing a business in the Middle East, or for assistance in analyzing and entering markets elsewhere in Asia, please contact us at dubai@dezshira.com or visit us at www.dezshira.com. To subscribe for content products from the Middle East Briefing, please click here.
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