The European Union and the United Arab Emirates (UAE) have formally launched negotiations for a bilateral free trade agreement, opening the possibility of the first comprehensive EU trade deal in the Gulf region.
European Commission President Ursula von der Leyen and His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates, first agreed to launch negotiations on a free trade agreement on 10 April. Today in Dubai, Commissioner for Trade and Economic Security Maroš Šefčovič and UAE Minister Thani bin Ahmed Al Zeyoudi reconfirmed the ambition to reach a commercially beneficial agreement and agreed on a roadmap, with substantive work set to begin as early as in June.
President von der Leyen said: “The launch of EU-UAE trade talks is an important milestone. We will now work together to seal a deal that can benefit our peoples and businesses, bringing us closer together in a spirit of cooperation. Such an agreement would help strengthen ties between the EU and the Gulf region, offering new opportunities for EU businesses while bolstering our partnership in areas that matter to EU citizens like renewable energy and digital technologies.”
The first meetings of negotiating teams will focus on reducing tariffs on goods and facilitating services, digital trade and investment flows. Talks will also explore ways to boost trade in strategic sectors, such as renewable energy, green hydrogen and critical raw materials. This is important for the EU and UAE’s common objective of transforming their economies for the green and digital transitions, as well as strengthening economic security more broadly.
There is strong potential for trade, investment, and cooperation between the EU and the UAE in cutting-edge sectors such as renewable energy, digital technologies and artificial intelligence (AI), Fintech, space technologies, advanced machineries, healthcare, logistics, infrastructural development, and sustainable food systems. An agreement with the UAE would add to the EU’s network of 44 trade deals with 76 countries – the world’s largest network of trade deals.
Background
EU-UAE trade in goods is worth EUR 55 billion (making the UAE our 19th trading partner) and in services some 39 billion (ranking as the 11th) annually. The UAE is the EU’s first export destination for goods and services, as well as the first foreign direct investment partner in the Gulf region. EU exports to the country having risen by 15% since last year, and by more than 48% since 2019, while the EU’s investment in the UAE has reached EUR 186 billion).
UAE exports to the EU include oil, gas and base metals, whereas the EU’s key exports comprise motorcars, machinery, chemical products, foodstuffs, and increasingly also green technologies. UAE tariffs are currently highest on tobacco, wines and spirits, and confectionery products.
