UAE's trade pacts with Turkey and Indonesia to come into force

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Two of the UAE's Comprehensive Economic Partnership Agreements (CEPA) will come into force on September 1, paving the way for a new era of trade and investment cooperation with two rapidly emerging global economies.

The trade pacts with Turkey and Indonesia will help remove or reduce tariffs on a vast array of goods, eliminate trade barriers and establish pathways for investment into priority sectors such as logistics, energy, food production, fintech, e-commerce, as well as travel and tourism.

These are now the third and fourth of the UAE’s Comprehensive Economic Partnership Agreements to come into force, following on from the successful roll-out of CEPAs with India, which was implemented in May 2022, and Israel, which was introduced in April 2023.

They are the latest components of a foreign trade agenda that seeks to establish stronger economic ties with strategically important nations around the world.

The UAE-Indonesia CEPA, which was signed in Abu Dhabi in July 2022, is projected to boost the value of bilateral non-oil trade from its current $4.08 billion to more than $10 billion within five years.

The agreement also seeks to raise the combined value of trade in services between the two nations to $630 million by 2030. Under the terms of the CEPA, more than 80 per cent of UAE exports to Indonesia will now be exempt from customs duties.

The UAE-Indonesian economic partnership also seeks to develop the rapidly expanding Islamic economy, which is projected to reach $3.2 trillion by 2024, while accelerating the implementation of investment projects worth $10 billion in sectors such as agriculture, energy, infrastructure, and logistics.

The UAE-Turkey CEPA has eliminated or reduced customs duties on 82 per cent of product lines, which account for more than 93 per cent of the value of bilateral non-oil trade.

In 2022, Turkey was the fastest growing of the UAE’s top ten trading partners, with non-oil trade climbing 40 per cent to $18.9 billion. The newly liberalized trading environment will see this rise to $40 billion within the next five years.

"Both agreements will unlock a range of opportunities for our private sector in two of the world’s most dynamic centers of growth, and help broaden our network of trade partnerships with strategically important markets – both regionally and globally," said Dr. Thani bin Ahmed Al-Zeyoudi, Minister of State for Foreign Trade.

He stressed that the agreements play a vital role in attaining the nation's objectives, in particular the vision laid out in “We The UAE 2031”, which seeks to double the UAE’s non-oil foreign trade to AED 4 trillion and elevate national exports to AED 800 billion.

The recently published statistics which show a record non-oil foreign trade value of AED 1.239 trillion for the first six months of 2023, demonstrate that the UAE is firmly on track – and that the CEPA programme will help maintain this upward trajectory.

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