UAE edging closer to trade deals with Kenya, Georgia and Ukraine

WAM

• UAE targeting deals with 8 countries to increase trade by $10bn
• It plans agreements with 26 countries in total
• Recent pact with Turkey expected to increase trade by over $40bn

The UAE is close to signing new free trade deals with Kenya, Georgia and Ukraine, while a third round of discussions on a GCC-wide agreement with the UK are set to get under way in Riyadh on Sunday.

It follows the recent signing of a comprehensive economic partnership agreement (Cepa) with Turkey earlier this month.

Talks towards a UAE-Kenya Cepa began in the second half of last year, in what will be the first bilateral trade deal that the UAE will sign with an African nation.

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The total value of non-oil trade between the two countries hit $2.3 billion in 2021.

The Emirates has previously made it clear that it prioritises a more robust trade relationship with Kenya, in its ‘Projects of the 50’ strategy published last year.

In the document, the Gulf state listed eight countries with which it aims to “undertake comprehensive economic partnership agreements” in order to boost overall trade volumes by $10 billion. These are Kenya, Ethiopia, Israel, India, Indonesia, the UK, Turkey and South Korea.

Shortly after the document was released, the UAE negotiated free trade agreements with Israel and India, and a similar agreement with Indonesia was reached in June last year.

The UAE’s trade minister, Dr Thani Al Zeyoudi, this month said the free trade agreements signed in the last two years will boost the Gulf state’s GDP by 2.8 percent by the end of the decade.

He also said they will help the UAE to reach its “ultimate” goal of accessing 90 percent of global trade flows.

Talks with Georgia began in September last year in the capital Tbilisi.

Bilateral non-oil trade between the two countries reached $166 million in the first half of 2022, a 104 percent increase on the same period the previous year, a 118 percent increase on 2020 and an 85 percent rise compared to 2019. 

In 2021 the UAE accounted for 63 percent of Georgia’s trade with the Arab world.

Scott Livermore, chief economist at Oxford Economics Middle East, said: “From a macro perspective the impact of these deals is likely to be small, although there will be benefits. 

“They show that the UAE is seeking a broad set of free trade relationships, and also values emerging and niche markets rather than just targeting the largest markets.”

Earlier this week, officials from the Emirates and Ukraine met to discuss enhancing trade relations, following the opening of discussions around a Cepa in December last year.

The Gulf state was Ukraine’s second largest trade partner in the GCC during 2021. The volume of non-oil intra-trade between the two countries reached more than AED1.4 billion in 2022.

The UAE plans to sign 26 Cepa deals under plans announced earlier this month by economy minister Abdulla bin Touq.

The most recent deal with Turkey is expected to boost the value of non-oil bilateral trade between the two countries to $40 billion in the next five years.

Meanwhile, a third round of free trade agreement negotiations between the GCC and the UK are due to begin on March 12 and run through to March 16 in Riyadh, with a view to signing a deal at the end of this year.

UK government analysis shows that a free trade agreement with the GCC is expected to boost trade by at least 16 percent, add at least £1.6 billion ($1.9 billion) a year to the British economy and contribute an additional £600 million to UK workers’ annual wages.

Katy Holmes, general manager of the British Business Group for Dubai and Northern Emirates, said: “Having just returned from Riyadh, where I was on a trade mission, and observing a huge increase in activity across the GCC through our networks, it feels that we are all more than ready for new trade deals. 

“The associated collaboration and knowledge sharing also supports foreign direct investment,” she said.