Contributes significantly to achieving the objectives of the “50 Projects” initiatives.
Dubai: Farouk Fayyad
In September 2021; The UAE government launched 50 national economic projects, aimed at supporting and strengthening the national economy, under the “50 Projects” initiatives.
These projects chart the course for the next fifty years, through structural and radical changes in the economic system, including empowering local economic sectors and national frameworks, developing a set of national laws and initiatives to empower Emirati skills, talents and entrepreneurs, and launching projects to attract talent and investors to the UAE and establish comprehensive economic partnerships.
Perhaps the most important of these projects that the UAE has included on its agenda is the launch of comprehensive economic partnerships, in which the state strengthens the movement of non-oil foreign trade, so as to improve the fluidity, speed and free movement of national goods and products, as well as an integrated set of facilities between the UAE, on the one hand, and between countries, on the other, to overcome trade barriers and reduce or eliminate customs duties.
- What are Global Economic Partnerships?
In order to contribute to the achievement of the UAE’s economic objectives, the country is striving to strengthen its international partnerships with strategic markets around the world, striving to strengthen its position as a major gateway for trade and logistics services flows, and the signing of the Comprehensive Economic Partnership Agreements (CEPA) is one of the key tools to achieve this strategic objective.
The United Arab Emirates signed the first Comprehensive Economic Partnership Agreement with the Republic of India on February 18, 2022 and it came into force in early May of the same year.
The United Arab Emirates signed partnership agreements with: Israel in early April 2023 and they entered into force, Indonesia in early September 2023, Turkey in early September 2023, Cambodia in late January of this year 2024 and Georgia on June 27 of the year. Current year 2024.
The country has also started negotiations and talks with many countries around the world, the most recent being the signing with the Republic of Mauritius – the first African country with which the UAE has signed a comprehensive partnership agreement – which is expected to enter into a comprehensive partnership agreement force after 3 months, in addition to negotiations with Vietnam, the Philippines, Kenya, Colombia, Ukraine and other countries.
Through these agreements, the UAE seeks to improve access to global markets, reduce or eliminate tariffs, facilitate customs procedures, provide clear and transparent rules and promote competition on the basis of fair trade.
- Economic diversification
Some people ask: Why did the UAE sign comprehensive economic partnerships, despite its great economic potential and important raw materials, perhaps the most important of which is the black treasure – oil and natural gas – which generates significant revenues in the budgets of governments, federal and local, in addition to its solid infrastructure? And the most mature public facilities in the world, including a network of roads, ports, airports and railways, through which the UAE aims to improve the performance and activities of transportation, warehousing, hospitality, tourism, logistics services, etc.?
What is the secret of these agreements? Perhaps the direction and future prospects of the UAE government, especially for the year 2071, in which the UAE seeks to abandon oil as a source of income, dispense with the last barrel of oil as it is one of the most important sectors supporting its national economy. and seek to diversify its non-oil economy, including multiple sectors and activities in retail, tourism, real estate, construction, professional activities, health, IT, technology and digital services, knowledge economy and many activities and services that can be exploited as natural components that contribute to increasing the UAE’s gross domestic product. One of its main priorities for the next stage is to put in place plans and strategies that enable it to quickly achieve its goal, the most important of which is the conclusion of comprehensive economic partnership agreements.
Considering the proven indicators and data, the non-oil foreign trade of the United Arab Emirates has seen a tremendous growth since the signing of the first comprehensive partnership agreement with India, with an increase of 45%, amounting to 800 billion dirhams, according to data from the Federal Center for Competitiveness and Statistics.
In 2021; The UAE’s non-oil trade reached; 1.8 trillion dirhams, divided between imports amounting to 992 billion dirhams, exports amounting to 332 billion dirhams and re-exports amounting to 464 billion dirhams.
The following year (2022); The United Arab Emirates’ trade amounted to approximately 2.17 billion dirhams, divided between: imports amounting to 1.22 billion dirhams, national exports amounting to 368 billion dirhams and re-exports amounting to 583 billion dirhams.
At the end of last year 2023, the country’s trade amounted to 2.6 trillion dirhams, divided between: imports at 1.4 trillion dirhams, exports at 441 billion dirhams and re-exports at 690 billion dirhams.
Regarding state imports, they have increased over the last three years by 41%, or 408 billion dirhams, going from 992 billion dirhams in 2021 to 1,400 billion dirhams at the end of 2023.
National exports also jumped by 33%, an increase of 109 billion dirhams, to 441 billion in 2023, against 332 billion in 2021.
Re-exported goods increased by 49%, or by 226 billion, to reach 690 billion in 2023, compared to 464 billion in 2021.
The UAE’s trade with India – as the first comprehensive economic partnership agreement signed by the UAE – increased by 21%, amounting to 35 billion dirhams, reaching around 165 billion dirhams in 2021, and increasing in 2022 to 190 billion and to 200 billion dirhams in 2023.
Non-oil intra-oil trade between the UAE and Turkey also increased by 104% in 2023, and Turkey’s share in the country’s total foreign trade reached 5.1%, making it the fastest growing country among the top 10 largest trading partners.
Turkey tops the list of recipients of non-oil exports from the UAE, thanks to its strong performance that began in August and September 2023, and in the last five months of 2023, it alone acquired around 60% of the UAE’s exports, coinciding with the start of the implementation of the partnership agreement between the two countries in early September/September 2023.
In terms of gross domestic product at constant prices, the UAE economy recorded a growth of 13.3% during the same period (2021-2023), with an increase of 200 billion dirhams, while the country’s gross domestic product reached 1.5 trillion dirhams in 2021 and rose to 1.62 trillion dirhams the following year (2022), and reached 1.7 trillion dirhams, at the end of last year, 2023.
In terms of non-oil production, it increased by 170 billion dirhams for the period 2021-2023, representing a growth of 16%.
The total non-oil activities of the State amounted to approximately 1.08 trillion dirhams in 2021, and it amounted to 1.17 trillion dirhams the following year 2022, and to 1.25 trillion dirhams at the end of last year 2023.
- Negotiations and talks
The total number of Comprehensive Economic Partnership Agreements for the UAE since the launch of the program until the end of last year 2023 has reached 10 agreements with countries of strategic, commercial and investment importance, across four continents, representing a major expansion of the country’s foreign trade network and providing more opportunities for the private sector and the Emirati business community, in one of the most dynamic economies in the world.
In 2023, the Comprehensive Economic Partnership Agreements between the UAE and Turkey, Indonesia and Israel entered into force, resulting in the elimination or reduction of customs duties, the removal of trade barriers and the opening of commercial opportunities for exporters and investors.
The final terms of the comprehensive economic partnership agreements were also concluded with South Korea, Colombia and Congo-Brazzaville.
The UAE has also begun negotiations to reach similar agreements with a group of other countries, including Serbia, Ukraine, Eurasia, Australia, the Philippines, Malaysia, Costa Rica, Kenya, Chile and Vietnam.
The Comprehensive Economic Partnership Programme, which also includes under its umbrella the partnership agreement with India that came into force in May 2022, is expected to increase UAE exports by 33% and contribute over Dh153 billion to the country’s gross domestic product by 2022-2031, representing a growth of around 10% compared to 2022. The UAE has also launched a new re-export programme that will expand the geographical reach of businesses, leveraging the country’s world-class infrastructure and strategic location as a global logistics hub for re-exporting goods across the globe.
The UAE’s re-export sector contributes 6.6% to the country’s gross domestic product, providing around 1.3 million job opportunities.
Objectives of the partnership:
- Improving access to global markets
- Reduce or eliminate customs duties
- Facilitate customs procedures
- Provide clear and transparent rules
- Promoting competition based on fair trade
Most important business achievements (2021 – 2023):
- UAE trade increases by 800 billion dirhams
- Imports increase by 41% to 408 billion
- Exports increase by 33% to 109 billion
- 49% growth in re-exports of 226 billion