EU and UAE to start talks on comprehensive trade deal

EU Cepa deal would be UAE’s 27th

Non-oil trade with EU worth $68bn

Talks to include renewable energy

The UAE and the European Union are to start negotiations towards a wide-ranging free trade agreement, officials for both sides said.

“The UAE shares strong and longstanding ties with the European Union and its member states,” Sheikh Mohamed bin Zayed Al Nahyan, the UAE’s president, said on X.

Through a comprehensive economic partnership agreement, or Cepa, the two parties will seek to strengthen ties and “promote economic growth”, Sheikh Mohamed and the president of the European Commission, Ursula von der Leyen, said in parallel posts on the platform

The UAE has signed 26 Cepas so far, including with India, Indonesia and Australia.

A Cepa tends to be even more comprehensive and ambitious than a free trade agreement, because it includes services, investment, intellectual property rights, government procurement, disputes and regulatory aspects of trade. 

An FTA, in contrast, focuses only on goods.

The main objectives of the planned Cepa talks include boosting bilateral trade and investment and the relationship between the respective business communities in the EU and the UAE, the UAE news agency Wam said. 

Negotiations with the EU are especially significant since the 27-member bloc is the UAE’s second-largest trading partner, making up 8.3 percent of its total non-oil exchanges, worth close to $68 billion last year, according to Wam. 

The negotiations begin as the US president, Donald Trump, seeks to redefine the rules of international commerce through far-reaching tariff policy changes that have caused sharp falls in stock markets and global oil prices.

The European Commission said in a read-out of the call between Sheikh Mohamed and von der Leyen that planned talks will focus on “deepening cooperation in strategic sectors such as renewable energy, green hydrogen and critical raw materials”.

In November the EU’s special envoy to the Gulf, Luigi Di Maio, said the EU bloc was working behind the scenes to revive and even upgrade formal negotiations over a larger free trade agreement with the whole GCC.

Those talks have been stalled since 2008, with differences over oil and public tenders. 

The UAE is the second largest economy in the 44-year-old, six-member Gulf Cooperation Council. Saudi Arabia is the largest. Kuwait, Qatar, Oman and Bahrain are the other members of the economic and political bloc and customs union.

Register now: It’s easy and free

AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East.