EU and UAE agree to start talks on free trade pace

Brussels — The EU and the United Arab Emirates (UAE) have agreed to start talks on a free trade agreement the upheaval and uncertainties created by US President Donald Trump's decision to impose sweeping tariffs on trading partners. He has since walked back some of the tariffs.

“Today, [European Commission] President Ursula von der Leyen held a cordial phone call with His Highness Sheikh Mohamed bin Zayed Al Nahyan, president of the United Arab Emirates. During their discussion, they agreed to launch negotiations on a free trade agreement,” the EU said in a statement.

The talks will focus on trade in goods, services, investment and deepening co-operation in sectors including renewable energy, green hydrogen and critical raw materials, the EU said.

The UAE’s president also said that the agreement to start talks about a comprehensive economic partnership agreement (CEPA) with the EU is aimed at deepening bilateral relations and promoting economic growth.

By reducing tariffs and unnecessary trade barriers and improving market access for goods and services, the pact is expected to foster opportunities in sectors including advanced manufacturing, healthcare, logistics and AI, said the UAE’s state news agency, known as WAM.

The EU is the UAE’s second-largest trading partner, accounting for 8.3% of the Emirati total non-oil trade. The wealthy Gulf state is also the EU’s largest export destination and investment partner in the Middle East and North Africa, WAM said.

The UAE has long advocated deeper EU involvement in the Gulf region. It is the Arab world’s second-largest economy, after Saudi Arabia, a major Middle East trade partner for many other nations, and its sovereign wealth funds rank among the world’s most active.

Reuters reported in March 2024 that Abu Dhabi was quietly urging the EU to start talks on a trade pact separate from the Gulf Co-operation Council, an Arab bloc that includes the UAE and Saudi Arabia.

Reuters