Khaleej Times, Wed, Apr 24, 2024 | Shawwal 15, 1445
UAE set to exceed Cepa target
Emirates:
The UAE signed its 11th Comprehensive Economic Partnership Agreement with
Colombia on Friday and said it now expects to exceed its initial target of
signing free trade agreements with 21 countries and five economic blocs aimed at
doubling foreign trade to Dh4 trillion by 2031.
The Cepa with Colombia comes close on the heels of reaching a similar agreement
with Costa Rica on Thursday.
Starting with the landmark agreement with India, the UAE has so far inked Cepas
with India, Turkey, Israel, Indonesia, Cambodia, Georgia, Mauritius, Kenya, the
Republic of Congo, Colombia and Costa Rica.
The Arab world’s second-largest economy has set an ambitious target of signing
26 Cepas, including 21 countries and five economic blocs covering a total of 103
countries and representing up to 95 per cent of total global trade.
“The UAE-Colombia Cepa will open a promising new chapter in deepening economic
ties between the two nations, enabling businesses to benefit from access to not
only to each other’s markets but also their respective regions,” said President
Sheikh Mohamed, who witnessed the signing of the agreement along with the
Colombian President Gustavo Petro. “Our two countries share a common vision of
creating a prosperous and sustainable future for our people, and this agreement
paves the way for a new era of cooperation and mutual economic growth,” said
Sheikh Mohamed.
Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said the country is
expected to exceed its initial target of signing 26 Cepas because of its pace of
work and interest from other countries.
The Cepa between the UAE and Colombia comes within the framework of the UAE's
game-changing Cepa Programme.
The agreement with Colombia is the latest pillar of the programme, which aims to
raise the value of the country's non-oil foreign trade to Dh4 trillion by 2031.
Agreements with India, Israel, Indonesia, Türkiye, and Cambodia are now in full
operation, making a significant contribution to the UAE’s non-oil foreign trade,
which reached a record Dh2.6 trillion – Dh 3.5 trillion including trade in
services – in 2023.
In 2023, the country’s non-oil trade hit a record Dh3.5 trillion, up from Dh2.23
trillion in 2022 as trade with its top 10 most important foreign partners grew
by 26 per cent. Non-oil trade with India, which signed a Cepa with the UAE in
May 2022, is up 3.9 per cent, accounting for more than 7.6 per cent of the total
trade, the UAE announced in February. Non-oil trade with Turkey, which
contributed 5.1 per cent to the UAE's total, grew by 103.7 per cent year-on-year
in 2023, the highest among the top 10 trading partners. This came after the two
countries brought their Cepa into effect in September.
Al Zeyoudi said that the Cepa with Colombia marks the beginning of a new era of
enhanced trade and investment cooperation between the two friendly nations. The
minister explained that this agreement establishes a solid foundation for
economic integration between the business communities and private sectors in
both countries, encompassing a wide range of priority sectors.
He pointed out that the agreement will contribute to creating numerous promising
investment and trade opportunities, stimulating trade flows between the two
sides, and building a flexible and efficient supply chain network that will
benefit the UAE and Colombia's economies. The pact will grant the UAE extensive
access to the Colombian market and the South American markets as a whole, by
reducing or eliminating customs duties, enhancing market access, and empowering
joint ventures.
The Cepa programme was a major component of the “Projects of the 50”, launched
in September 2021 to strengthen the UAE's position as a global trade, business
and investment hub. Cepas have also been designed to support greater foreign
direct investment (FDI) flows as UAE aims to attract $150 billion in foreign
investment by 2031 and rank among the top 10 countries globally in term of
attracting FDI.
Al Zeyoudi stated that the agreement will open up new avenues for investment in
vital areas such as energy, advanced technology, healthcare, tourism, and the
environment, offering exceptional opportunities for the UAE's private sector.
Columbia aims to attract investment between $600 million and $700 million from
the UAE following the Cepa.
Trade Minister German Mendoza said that the new UAE investment is expected to be
made in sectors including green hydrogen and digital economy.
The new deal “will enhance the trade and investment cooperation between the two
countries, with the participation of their private sectors in business,
services, trade, investment, and other vital sectors that will have a positive
economic impact,” Mendoza said.