UAE, Australia reach trade deal to boost exports and investment

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The UAE has struck a trade deal with Australia that is expected to boost supplies of agricultural products and resources, as well as give Abu Dhabi greater access to investments in green energy and key minerals.

The trade pact will eliminate tariffs on about 99% of Australian products, saving about $US91 million (A$135 million) in the first year, rising to A$160 million a year once the agreement is fully implemented.

“Under this trade agreement, Australian exports are set to increase by A$678 million per year, but this agreement means more to Australia than just the numbers,” said Don Farrell, Australia’s Minister for Trade and Tourism.

The UAE is Australia’s largest trade and investment partner in the Middle East, with bilateral trade expected to reach $9.9 billion in 2023.

Farrell said the deal could help unlock UAE investment in important policy areas such as Australia’s transition to renewable energy and building supply chains for key minerals, in addition to trade benefits.

“The UAE has some of the largest national wealth funds in the world. A trade agreement with the UAE will facilitate investment, which is important to achieving the government’s ambition to become a renewable energy superpower.”

The Australian mining industry is also expected to benefit from reduced tariffs on exports, including on alumina, which was estimated to be worth AUD1 billion in 2023.

The country’s main exports to the UAE include meat, dairy products, oilseeds, seafood, steel, rapeseed, nuts, honey, coal, chickpeas and lentils.

Australia’s Trade Department said the two countries were currently working to formalize the text of the legal treaty in preparation for signing it this year. The agreement is expected to enter into force this year.

In the meantime, the UAE has initiated a series of bilateral trade, investment and cooperation agreements – known as Comprehensive Economic Partnership Agreements (CEPAs) since 2021 – to support efforts to diversify income sources and economic sectors.

The UAE has ratified five CEPAs to date, with India, Israel, Indonesia, Turkey, Cambodia and Georgia. It is also negotiating with more markets of strategic importance at the regional and global level, including Congo-Brazzaville, Malaysia and New Zealand.

Read: UAE’s non-oil foreign trade exceeds AED 1.4 trillion in first half of 2024