Trade

Australia and UAE hope for $678m boost after trade deal

September 17, 2024, 1:44 PM

Australian trade minister Don Farrell announces the UAE trade deal at Parliament House in Canberra

Cepa to be signed this year
Tariffs removed on Australian imports
UAE market open to service providers

Australian exports to the UAE are expected to increase by $678 million after the two countries completed discussions over a comprehensive economic partnership agreement (Cepa).

The deal, expected to be signed later this year, will make more than 99 percent of Australian exports to the UAE tariff-free, saving exporters up to $160 million annually.

The agreement will enhance access for Australian goods, from meat and dairy products to steel and alumina, used as a starting material for the smelting of aluminium.

It will also open the UAE market to Australian service providers in education, finance and health, with full foreign ownership rights.

It also cuts Australian import tariffs on UAE-produced furniture, copper wire, glass containers and plastic.

The UAE is already Australia’s largest trading partner in the Middle East, with two-way trade valued at about $10 billion in 2023.

Trade links are recovering to pre-Covid levels, with bilateral non-oil trade reaching $4.5 billion in 2022, up 28 percent from 2021.

More than 300 Australian businesses operate in the UAE, supported by an expatriate community of around 16,000 Australians.

The new agreement is expected to boost investment, especially in sectors critical to energy transition, such as renewable energy and mining. The UAE recently invested $4.2 billion in a major Australian urea project.

The Australian minister for trade and tourism, Don Farrell, said: "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 Albanese government's ambition of becoming a renewable energy superpower."

The agreement also includes the first dedicated chapter on First Nations trade, offering Indigenous businesses preferential market access.

However, concerns remain over labour rights, with the Australian Council of Trade Unions voicing apprehension about the deal's potential impact.

The UAE, which hosts 77 flights a week to Australia and is a key hub for Australian fresh produce exports, sees Australia as a natural partner, with opportunities in logistics, food security, tourism and clean energy.

Trade talks, which began in 2005 and stalled in 2009, resumed last year, with officials optimistic about formalising the agreement before the end of the year.

The UAE has signed 11 agreements with countries across the world so far since launching its Cepa programme in September 2021. The programme aims to increase the country’s non-oil foreign trade to AED4 trillion by 2031.