Economy

UAE to launch free trade talks with Ukraine

December 5, 2022, 6:10 PM

Yulia Svyrydenko, Ukraine's economy minister, speaks during a G7 meeting in Germany. Her government is about to begin trade talks with the UAE

Ministers unveil plan for comprehensive economic partnership
Bilateral trade has risen sharply, surpassing pre-pandemic figure
War-torn Ukraine is an important source of grain for Middle East

The UAE is launching negotiations for a free trade deal with Ukraine.

Dr Thani Bin Ahmed Al Zeyoudi, the UAE’s minister of state for foreign trade, and Yulia Svyrydenko, Ukraine’s first deputy prime minister and economy minister, issued a statement signalling their plan to work towards a comprehensive economic partnership agreement.

The CEPA (Comprehensive Economic Partnership Agreement) move comes almost 10 months after Russia’s invasion of its neighbour and as missile strikes have hit energy infrastructure across Ukraine, causing widespread power cuts.

The UAE has tried to remain neutral in the conflict despite Western pressure on Gulf oil producers to help isolate Opec+ member Russia.

Svyrydenko said last month that Russian strikes on her country’s critical infrastructure could lead to a larger economic contraction this year than the 35 percent originally forecast.

In the year before the conflict, trade between Ukraine and the UAE rose sharply.

Non-oil trade between the two reached $904.4 million in 2021, a 28.4 percent increase over the previous year and 12.2 percent more than before the global pandemic in 2019.

State news agency WAM said Emirati investment in Ukraine had reached nearly $243.3 million in 2021, with Ukrainian investment flows into the UAE totalling $84 million.

President Volodymyr Zelensky visited the Emirates in February 2021 and more than $3 billion in trade and investment pledges were made during the trip.

The CEPA talks are a key component in the UAE’s efforts to help reinvigorate the national economy of Ukraine, which is one of the Middle East’s most important sources of grain.

Al Zeyoudi said the agreement would offer “a raft of new opportunities for our exporters, investors, and manufacturers while also opening up access to new markets in Asia, Africa, and the Middle East for Ukraine’s agricultural and industrial output”.

He added: “We are committed to negotiating a mutually beneficial deal that can not only help drive Ukraine’s economic recovery but also foster long-term growth and opportunity.”

Svyrydenko said a CEPA would “unlock the full potential of our cooperation in trade and investment, helping our business communities to grow and take advantage of the new opportunities”.

Negotiations are due to start in a matter of weeks and follow the conclusion of CEPAs with India, Indonesia and Israel.

The UAE is also in trade talks with Turkey, Georgia and Cambodia, as part of its strategy to double its economy to AED3 trillion ($817 million) by 2030.

In October, Sheikh Mohamed Bin Zayed Al Nahyan, the UAE’s president, ordered $100 million in humanitarian aid to be sent to Ukrainian civilians.