Economy

UAE and Italy elevate trade status in bid to grow $7bn relationship

March 7, 2023, 5:12 AM

Georgia Meloni and Sheikh Mohamed bin Zayed Al Nahyan — Italy's PM Giorgia Meloni was greeted by Dr Sultan Al Jaber, chairman of Adnoc and Cop28 president, during her first visit to the UAE

UAE-Italy trade grew by 15.5% in first 10 months of 2022
More than 600 Italian companies operate in the UAE
Italy exported $1.1bn of jewellery to the UAE last year

The UAE and Italy have elevated relations to the level of a strategic partnership as the countries aim to build on growing trade figures seen last year.

The announcement came after a meeting held on Saturday between President Sheikh Mohamed bin Zayed Al Nahyan and Italy’s Prime Minister Giorgia Meloni in Abu Dhabi during her first visit to the UAE.

Under a ‘declaration of intent’, it is seeking closer collaboration on direct investment and partnerships in sectors including healthcare, food and water security, technology, defence, renewable energy, sports and education.

The deal comes as trade between Italy and the UAE in the first 10 months of 2022 reached $7 billion, an increase of 15.5 percent on the previous year, according to the Italian Trade Agency.

More than 600 Italian companies are currently operating in the Emirates, and Italy is the EU’s largest trading partner to the UAE. Its main exports are jewellery, machinery and agri-food.

Last year Italy exported almost $1.1 billion worth of jewellery to the Emirates, making it the UAE’s third largest supplier, with 11 percent of the market share, according to Lorenzo Fanara, Italy’s ambassador to the UAE.

“The production of gold and silver jewellery is one of the main niches in the Italian economy. This has been recognised in the UAE,” he said.

According to the latest data from the World Gold Council, the demand for gold jewellery in the UAE surged by 80 percent in the second quarter of 2022 to 13.2 tonnes, and the market is expected to reach $10.7 billion by 2027.

Healthcare is also high on the agenda for Italy in the UAE, and some 160 Italian companies from the sector exhibited at Arab Health 2023 in Dubai last month.

Italy is an international research and production hub for biotech drugs and vaccine manufacturing. Amedeo Scarpa, Italian trade commissioner to the UAE, said it allocated more than 85 percent of this production to foreign markets. The UAE was one of its best partners, Scarpa said, with demand averaging $75 million.

Meloni met with President Sheikh Mohamed bin Zayed Al Nahyan on Saturday. Picture: Creative Commons/Italian government

Under the new strategic partnership agreement, a memorandum of understanding for cooperation on energy transition projects and sustainability initiatives was also agreed between Abu Dhabi’s Adnoc and the Italian energy group Eni.

“The UAE and Italy share common goals, including achieving sustainable development and economic growth, strengthening cooperation with the international community, prosperity and stability,” said a joint statement issued by the two governments.

Prime Minister Meloni’s visit is seen as part of efforts to restore relations after Italy halted the sale of thousands of missiles to Saudi Arabia and the UAE in 2021, citing Rome’s commitment to restoring peace in Yemen.

Last May, the EU announced a similar strategic partnership with the GCC.

At the time, Josep Borrell, the EU’s high representative for foreign affairs and security policy, said: “We need to work more closely together on stability in the Gulf and the Middle East, on global security threats, energy security, climate change and the green transition, digitalisation, trade and investment.

“We also need to strengthen contacts between students, researchers, businesses and citizens.”