As the last step before their ratification and implementation, the UAE has signed trade agreements with Malaysia, Kenya, and New Zealand as part of its Comprehensive Economic Partnership Agreements (CEPAs) program. 

The Gulf state’s larger plan to develop its post-oil economy and promote global trade is reflected in these agreements.

Expanding economic horizons

“The UAE promotes economic growth by implementing more robust open trade and investment policies.” These agreements are anticipated to bring additional commercial and investment benefits to the nation’s business community,” stated Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade.

Since the CEPA initiative began in 2021, the UAE has signed 24 trade agreements with nations and international blocs. These agreements affect about 2.5 billion people, or 25% of the world’s population. 

Through these collaborations, the UAE hopes to lessen its dependence on oil, diversify its economy, and increase trade in high-potential industries.

UAE-Kenya CEPA: Boosting non-oil trade

According to experts, Kenya and the United Arab Emirates recently signed a Comprehensive Economic Partnership Agreement (CEPA), which is a major turning point in their bilateral ties.

The historic agreement was signed last week, marking the first time the United Arab Emirates had a country in Africa. It is expected to open up economic opportunities for Kenya and promote job creation and economic growth.

“For Kenya, this agreement is a game-changer,” President William Ruto said at the signing ceremony in the United Arab Emirates. “It will increase our competitiveness in the global market, unlock substantial economic potential, and create jobs for our people.”

The CEPA aims to strengthen the two nations’ existing trading ties. As of 2023, bilateral trade between Kenya and the UAE reached $3.3 billion, becoming the UAE Kenya’s sixth-largest export destination and second-largest import source.

The trade agreement strengthens Kenya’s robust business relationships. The first nine months of 2024 saw a 29.1% growth in bilateral non-oil trade between the two countries, reaching US$3.1 billion. The deal is anticipated to increase investments in ICT, finance, tourism, renewable energy, and infrastructure.

UAE-Malaysia CEPA: Focus on strategic sectors

Over the next five years, trade between the UAE and Malaysia is predicted to expand by 60% due to the signing of the comprehensive economic partnership agreement (Cepa).

In October, the two countries concluded talks for a Cepa deal to boost market access for service exports, simplify trade processes, and lower or eliminate tariffs.

In 2023, the UAE and Malaysia’s bilateral non-oil trade was valued at US$4.9 billion. In the first nine months of 2024, it was valued at US$4 billion. 

The CEPA with Malaysia focuses on key industries, including data centers, artificial intelligence, ports, logistics, food security, and pharmaceuticals, creating the framework for substantial trade and investment possibilities.

The United Arab Emirates accounts for one-third of Malaysia’s commerce with Arab nations, making it the country’s second-largest trading partner in the Arab world.

A strategic hub for Malaysian exports to the Middle East and North Africa, Cepa is anticipated to open the ASEAN market to UAE companies.

UAE-New Zealand CEPA: Tariff reductions and trade growth

As per the agreement with New Zealand, tariffs on 98.5 percent of the nation’s exports to the UAE will be eliminated immediately when it is implemented. 

And that percentage would rise to 99 percent in three years. In the first nine months of 2024, bilateral non-oil trade between the two nations totaled US$642 million, highlighting the expanding economic partnership.

Expanding to the Eurasian Economic Union

The UAE finalized CEPA negotiations with the Eurasian Economic Union (EAEU), which includes Russia, Kyrgyzstan, Kazakhstan, Belarus, and Armenia, in December 2024. 

The value of non-oil trade with the EAEU group increased by 29.6% to US$13.7 billion in H1 2024 from the same period in 2023. This agreement aims to create new opportunities for mutual trade by integrating digital trade, e-commerce, and SME collaboration.

Driving non-oil trade growth

By 2031, the UAE wants its non-oil foreign trade to reach US$1.1 trillion (Dhs4 trillion). The nation is strengthening its ties with rapidly expanding economies. 

It also attracted record-breaking foreign investment, as seen by its record-breaking non-oil trade of Dhs1.4 trillion in H1 2024, an 11.2 percent year-over-year growth.

Outlook

The UAE’s efforts to expand commerce with important international markets, such as the ASEAN bloc, have a GDP of over US$2.9 trillion. It also has a population of 647 million, centered on the CEPA program. 

Since 2021, the UAE has ratified CEPAs with India, Israel, Indonesia, Turkey, Cambodia, and Georgia to diversify its trade and investment portfolio further.

Economic Impact and Growth Opportunities

All parties expect to gain economically from the CEPA accords with Malaysia, Kenya, and New Zealand. These collaborations will open new doors for companies and investors by lowering tariffs, streamlining customs processes, and encouraging innovation.

• Job Creation: The agreements are anticipated to improve economic stability and prosperity. They are expected to generate thousands of jobs in various industries, such as manufacturing, technology, agriculture, and logistics.
• Increased FDI: Since these agreements offer a stable and alluring environment for foreign businesses, foreign direct investment (FDI) will probably rise. The UAE is ideally situated to access international markets due to its advantageous location and business-friendly regulations.
• Trade Diversification: The UAE is resilient to global economic changes. It also reduces reliance on traditional markets by developing trade partnerships with other locations.

A Vision for the Future

The signing of these CEPAs shows the UAE’s commitment to creating a more sustainable and related world beyond simple economic benefits. The UAE promotes a culture of mutual development and innovation through partnerships with Malaysia, Kenya, and New Zealand.