The UAE has reached a trade agreement with Australia that is expected to boost shipments of agricultural products and resources, as well as provide Abu Dhabi with greater access to investment in green energy and critical minerals.
The trade pact will remove tariffs on about 99 per cent of Australian products, resulting in savings of $91m (AUD135m) in the first year, rising to AUD160m per year once the agreement is fully implemented. It builds on the growing economic relations between the two countries, with bilateral non-oil trade reaching $2.3bn in H1 2024, up 10 per cent compared to the same period a year ago.
“Under this trade agreement, Aussie exports are expected to increase by AUD678m per year, but this deal means more for Australia than just numbers,” Don Farrell, Australia’s Minister for Trade and Tourism.
The UAE is Australia’s largest trade and investment partner in the Middle East, with two-way trade worth $9.9bn in 2023.
Farrell said the deal may help unlock UAE investment in important policy areas such as Australia’s shift to renewable energy and building supply chains of critical minerals in addition to the trade benefits.
“The UAE has some of the largest sovereign wealth funds in the world. A trade agreement with the UAE will facilitate investment, which is important to achieving the government’s ambition of becoming a renewable energy superpower.”
Australia’s mining industry is also expected to benefit from tariff cuts on exports, including alumina, which was valued at AUD1bn in 2023.
The country’s top exports to the UAE include meat, dairy, oil seeds, seafood, steel, canola seeds, nuts, honey, coal, chickpeas and lentils.
Since 2023, the two countries have committed a combined $14bn to each other’s economies, with more than 300 Australian businesses operating in the UAE in sectors such as construction, financial services, agriculture, and education.
Australia’s trade ministry said the two countries are now working to formalise the legal treaty text in preparation for signing later this year. The deal is expected to become effective later this year.
Meanwhile, the UAE has initiated a raft of bilateral trade, investment, and cooperation deals – called Comprehensive Economic Partnership Agreements (CEPAs) since 2021 – to bolster efforts to diversify income sources and economic sectors.
The UAE has ratified five CEPAs with India, Israel, Indonesia, Türkiye, Cambodia, and Georgia so far. It is also in negotiations with more markets of strategic importance at the regional and global levels, including Congo-Brazzaville, Malaysia and New Zealand.