UAE-Australia Cepa to boost bilateral trade to more than $15 billion

The Comprehensive Economic Partnership Agreement (Cepa) signed between the UAE and Australia on Wednesday marks a major step forward for both regions, setting the stage for growth and collaboration, analysts say.

Josh Gilbert, Market Analyst at eToro, said: “This agreement represents a pivotal moment for both Australia and the UAE, unlocking new opportunities for sectors like food production and energy resources. It reflects the global shift toward sustainability and economic diversification.”

Australian food producers, in particular, stand out as big winners. Reduced export tariffs are enabling premium Australian food products to flow more easily into the UAE, meeting a growing demand in a region that heavily relies on food imports. As the UAE’s population and economy continue to expand, this partnership looks set to become an indispensable avenue for food security and quality supply.

The UAE’s access to essential minerals for clean energy — like Australia’s abundant lithium and copper — opens doors for mutual progress in the global energy transition. For the UAE, known primarily for its vast oil reserves, securing these critical resources is a forward-looking move that will help fuel the next phase of its development.

The Cepa is expected to propel bilateral non-oil trade to over $15 billion by the year 2032 – a threefold increase on the $4.23 billion recorded in 2023.

Once ratified, the deal will be Australia’s first trade agreement with a country in the Middle East and North Africa region and represent an important addition to the UAE’s Cepa programme.

The UAE-Australia agreement builds on growing economic relations between the two countries, with bilateral non-oil trade reaching $2.3 billion in the first half of 2024, an increase of 10.1 per cent from H1 2023.

The UAE is Australia’s leading trade partner in the Middle East and its 20th largest partner globally. As of 2023, the two countries have also committed a combined $14 billion to each other’s economies, with more than 300 Australian businesses operating in the UAE in sectors such as construction, financial services, agriculture, and education.

This Cepa features dedicated chapters to enhance cooperation between the UAE and Australia on areas such as the environment, women empowerment, sustainable agriculture and food systems, and animal welfare.

In addition to the Cepa, six further agreements were signed during the high-level UAE delegation’s visit to Australia. These included an agreement to promote and protect investments between the UAE and Australia, and five investment cooperation memoranda of understanding (MoUs) to facilitate and promote two-way investment in sectors of national priority including green and renewable energy, infrastructure and development, data centres and artificial intelligence projects, minerals and mining, and food and agriculture.

Sheikh Abdullah bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Foreign Affairs, and Penny Wong, Australian Minister of Foreign Affairs, attended the signing ceremony. The agreement was signed by Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, and Don Farrell, Australian Minister for Trade and Tourism. The signing ceremony was attended by Saeed Mubarak Al Hajri, Assistant Minister for Economic and Commercial Affairs, and Dr. Fahad Obaid Mohamed Altaffag Almarashda, UAE Ambassador to Australia, as well as officials from both countries.

Sheikh Abdullah said the Cepa was the latest milestone in a foreign trade policy that is reaping considerable rewards. “The signing of a Comprehensive Economic Partnership Agreement between the UAE and Australia is a clear demonstration of our desire to build bridges of cooperation and mutual benefit across the globe. Australia has long been an economic partner and trusted friend, with well-established links across trade, culture and sport, and this agreement will deepen these bonds and create greater opportunity for our businesses to collaborate and grow,” he said.

The UAE’s Cepa programme is a key pillar of the nation’s growth strategy, which targets $1 trillion in total trade value by 2031 and aims to double the size of the wider economy to surpass $800 billion by 2030.

To date, agreements implemented in the programme, which was launched in September 2021, span the Middle East, Africa, Southeast Asia, South America, and Eastern Europe and encompass almost a quarter of the world’s population.

— With inputs from WAM