UAE, Vietnam to launch free trade talks

The UAE and Vietnam have agreed to start talks on establishing a comprehensive economic partnership agreement (CEPA), as the two countries seek to promote collaboration in trade, investment, economy, industry, energy, logistics, agriculture and infrastructure.

The launch of CEPA negotiations is the result of a shared aspiration to elevate the existing trade and economic ties to new heights, according to the state-run news agency WAM.

“The UAE is Vietnam’s number one Arab trade partner, accounting for 39 per cent of its total trade with the Arab countries,” said Dr Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade.

The volume of non-oil trade between the two countries reached $8bn (Dhs29.4bn) in 2022 while trade in goods other than mobile phones and accessories jumped by 46 per cent from less than 36 per cent in 2019.

The trade and investment exchanges between the UAE and Vietnam totalled Dhs13.5bn in 2022, up 9 per cent from 2021 and with a 34 and 26 per cent growth from 2020 and 2019, respectively.

UAE, Vietnam sign mutual declaration of intent to begin CEPA talks#WamNews https://t.co/UFOSuxl8NU pic.twitter.com/aezIlm54o2

— WAM English (@WAMNEWS_ENG) April 6, 2023

The UAE’s investments in Vietnam totalled Dhs260m in 2022 and companies with investments in the Southeast Asian country include DP World, Emirates Investment Authority, Mubadala and Borouge.

Al Zeyoudi said the bilateral trade agreement between the two nations will enhance economic and trade cooperation in unprecedented ways while supporting the private sector’s access to both markets. It will also create new investment opportunities, which will result in a higher volume of trade exchanges.

Vietnam’s Minister of Trade Nguyen Hong Dien concurred with Al Zeyoudi saying there is huge potential and opportunities from the agreement for both countries.

“The UAE has strengths as a trans-shipment, financial and logistics centre, while Vietnam is also becoming a factory for many crucial, global industries,” he said.

UAE advances growth with CEPA deals

Meanwhile, the development of the UAE’s economic legislation, which enabled full foreign ownership of companies and significantly enhanced the ease of doing business, is reinforcing the country’s position as a global hub for trade and investment.

The talks to launch bilateral trade negotiations between the two countries come on the heels of the World Trade Organisation’s (WTO) Global Trade Outlook and Statistics Report 2022, which ranked the UAE 11^th in terms of exports of commodities and the 18^th importer of global merchandise goods trade worldwide.

Read: UAE’s global merchandise trade exceeds $1tn in 2022

The country’s trade in goods with the rest of the world hit $1.024tn in 2022 as the share of both exports and imports increased on the back of higher crude oil prices. Imports accounted for 22 per cent of that amount while exports grew by 41 per cent.

Earlier in March, the UAE signed off on a free trade pact with Turkey. The trade deal is expected to more than double bilateral trade volumes between the two countries to anywhere between $40bn and $45bn within the next five years.

Last month, the emirates also agreed to start preliminary negotiations on a bilateral trade deal targeting a broad expansion of economic ties with Costa Rica.

Since 2021, the country has signed four agreements so far – with India, Israel, Indonesia and Turkiye – and is currently in talks with others including South Korea and Ukraine as the Gulf nation remodels itself as a global hub for business and finance beyond the Middle East.

The UAE plans to finalise a deal with Ukraine and Colombia in the future. A free trade agreement with Ukraine would be the Gulf nation’s first such deal with a European country, after more than $3bn in trade and investment pledges made during President Volodymyr Zelensky’s visit to the Gulf country in February 2021.

The country’s trade ambitions are in line with the ‘We the UAE Vision 2031’, which aims to double the national economy from Dhs1.49tn to Dhs3tn, increase national non-oil exports to Dhs800bn and raise the value of the UAE’s foreign trade to Dhs4tn by 2031.

Read: UAE, Costa Rica to launch free trade talks