In a pivotal meeting aimed at elevating bilateral relations, H.H. Sheikh Abdullah bin Zayed Al Nahyan, UAE Deputy Prime Minister and Minister of Foreign Affairs, met with Australian Prime Minister Anthony Albanese in Canberra on 6th November 2024. The discussions underscored the two nations’ commitment to further enhancing their relationship across multiple sectors, emphasizing the ongoing growth and importance of their strategic economic and diplomatic ties. This meeting also saw the signing of the Comprehensive Economic Partnership Agreement (CEPA), expected to triple bilateral non-oil trade to over $15 billion by 2032.
Strengthening Economic and Trade Relations
The visit highlights a new era of cooperation, with the UAE and Australia aiming to deepen connections in the areas of trade, economy, energy, and climate. Both countries share an ambition to foster a comprehensive economic partnership, supporting mutual developmental objectives and capitalizing on available opportunities for sustainable growth. The UAE has invested significantly in establishing partnerships around the world, with Australia emerging as a pivotal ally in the Indo-Pacific region.
Commenting on the strategic importance of the relationship, Sheikh Abdullah emphasized the UAE’s pride in this growing partnership, noting the long-standing economic ties and shared vision for prosperity. “Australia has long been an economic partner and trusted friend,” he said, “and this agreement will deepen these bonds and create greater opportunity for our businesses to collaborate and grow.”
The signing of the CEPA: A Milestone in UAE-Australia Relations
The UAE-Australia CEPA marks Australia’s first trade agreement with a country in the Middle East and North Africa region, symbolizing a landmark addition to the UAE’s rapidly expanding CEPA program. Signed by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, and Don Farrell, Australian Minister for Trade and Tourism, the agreement seeks to boost bilateral non-oil trade to over $15 billion by 2032, a threefold increase from 2023 levels. Once ratified, the CEPA will facilitate extensive benefits for both countries by eliminating over 99 percent of tariffs on Australian products entering the UAE, projected to save $135 million in tariffs in its first year and up to $160 million annually when fully implemented. This tariff reduction will not only benefit exporters but is also expected to reduce the cost of UAE products in the Australian market, saving Australian households and businesses approximately $40 million per year. The agreement also introduces provisions that simplify processes for skilled professionals to work temporarily in the UAE, paving the way for broader talent exchange and knowledge transfer between the two nations.
Expanding Investment and Economic Opportunities
In addition to the CEPA, six further agreements were signed to promote investment cooperation in sectors vital to both nations’ economies, including green energy, infrastructure, data centers, artificial intelligence, and agriculture. Among these is a dedicated agreement focused on investment protection, ensuring a secure and transparent environment for businesses and investors. Reflecting on the potential benefits, Farrell highlighted that the CEPA would increase Australian exports by $678 million annually, translating into significant economic growth and job creation. Beyond trade figures, the agreement opens a gateway for Australian exporters to expand into the Middle Eastern market, with a consumer base of 58 million and a combined GDP of A$1.4 trillion. It also promises to support Australian businesses in diversifying their export markets, thereby bolstering economic resilience.
UAE and Australia’s Growing Trade Relationship
The UAE and Australia have witnessed a robust expansion in trade relations, with non-oil trade reaching $2.3 billion in the first half of 2024 alone—a 10.1 percent increase from the same period in 2023. The UAE stands as Australia’s leading trade partner in the Middle East and its 20th-largest global trade partner, underpinned by a shared investment of $14 billion across their respective economies. More than 300 Australian companies currently operate in the UAE, spanning industries from construction to education, reinforcing the UAE’s position as a gateway for Australian businesses in the broader Middle East region.
With the CEPA, this collaboration is poised to deepen, enhancing economic diversity and fostering a more resilient trade relationship. For the UAE, this agreement also aligns with its national growth strategy, which envisions $1 trillion in total trade value by 2031 and an economy that doubles in size to surpass $800 billion by 2030. Since launching its CEPA program in 2021, the UAE has formed trade agreements with countries across the Middle East, Africa, Southeast Asia, South America, and Eastern Europe, covering a quarter of the world’s population.
Targeting Sustainable and Inclusive Growth
Notably, the UAE-Australia CEPA includes specific chapters focused on sustainable agriculture, environmental cooperation, women’s empowerment, and animal welfare. By addressing these areas, the agreement aligns with the global push toward environmentally sustainable and inclusive economic growth. The UAE’s investment strategy emphasizes green technology, renewable energy, and climate initiatives—sectors that align with Australia’s priorities, fostering cooperation in developing environmentally responsible policies. Both nations have committed to integrating advanced sustainability practices into their economies. Australia’s agriculture and food systems sector, a significant component of the agreement, will benefit from increased export opportunities to the UAE, where there is a growing demand for high-quality, sustainable agricultural products.
Broader Implications of UAE-Australia CEPA
The UAE-Australia CEPA is expected to enhance certainty for Australian service providers operating in the UAE, creating favorable conditions for industries ranging from financial services to engineering and consultancy. By encouraging private-sector collaboration and removing key trade barriers, the CEPA paves the way for Australian and UAE businesses to enter new markets, gain competitive advantages, and foster long-term partnerships. From a geopolitical standpoint, the UAE-Australia CEPA reinforces both countries’ commitment to open trade and cooperation amid an evolving global economic landscape. The agreement symbolizes a shared dedication to a stable, inclusive international order, reinforcing diplomatic ties that support peace and mutual economic benefit.
The UAE and Australia’s Comprehensive Economic Partnership Agreement (CEPA) reflects the ambitious vision and shared values of both countries, reinforcing their commitment to economic diversification, sustainable growth, and global engagement. Through this agreement, the UAE and Australia are poised to elevate their partnership to new heights, advancing economic prosperity and mutual development goals. With its far-reaching implications, the CEPA lays the groundwork for a prosperous future, solidifying UAE-Australia relations as a model of international collaboration and economic resilience in an increasingly interconnected world.
