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Press Dossier    By Date   24/04/2024 UAE set to exceed Cepa target

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.

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