Australia’s investment and trade ties with the UAE continue to grow

Australia and the UAE have enjoyed stable and positive diplomatic and trade relationships for many years, notably in agriculture, and those economic ties are set to deepen.

The UAE ranks as Australia’s largest trade and investment partner in the Middle East. Picture: Abu Dhabi Tourism Authority

According to former Qantas boss Alan Joyce, March 31, 2013 was a defining moment in Qantas’s 92-year history. It was marked by two Airbus A380s roaring past the Sydney Opera House in a world-first formation fly-past. The manoeuvre required more than 540 hours of planning and 17 four-hour simulator sessions.

And so began the game changing partnership between Emirates and Qantas. Sydney, Melbourne, Brisbane and Perth were no longer the only destinations accessible from Dubai. Hobart, Cairns, Broome and Coffs Harbour were suddenly active nodes in a global network. By October 2021, when the partnership was extended for another five years, more than 13 million passengers had travelled on the joint network, clocking up more than 87 billon kilometres.

There was another defining moment late last month.

Trade and Tourism Minister Don Farrell announced Australia had reached a trade deal with the UAE, the government’s first since coming to office in May 2022. This is good news for both sides of what is already an established trade corridor.

Australia and the UAE have enjoyed stable and positive diplomatic and trade relationships for many years, notably in agriculture. The benefits of formally enhancing bilateral trade and investment will deepen economic ties, accelerated by enhanced market access, tariff liberalisation, simplification of Customs procedures and clarified regulatory frameworks.

The olives grown throughout our southeastern and southwestern seaboards may now find themselves on more UAE tables if the 5 per cent duty is dropped. Already, the UAE is Australia’s fourth-most important market for fresh fruit, importing more than 1300 tonnes of apricots, nectarines, peaches, and plums annually.

It is a similar story in the livestock sector, which contributes more than $1bn in export earnings to the Australian economy and employs 13,000 mainly regional Australians.

Estimated tariff savings stand at $135m in the first year alone, increasing to $160m every year once the trade agreement is fully implemented. It is not just exports growth and jobs in Australia that should benefit from the new trade deal. More than 300 Australian companies operate in the UAE, many using it as a regional base given its advanced transport, financial and trade infrastructure.

A Qantas A380, top, and an Emirates A380 fly in formation over Sydney Harbour in March 2013 when the airlines announced a partnership deal. Picture: James Morgan/Qantas

Investment flows are also thriving. According to DFAT, UAE investment in Australia is close to $12.7bn. The Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, has invested in ports, the TransGrid electricity network and the Queensland Motorway project.

In May this year, Mubadala, another of Abu Dhabi’s SWFs, alongside Global Infrastructure Partners, announced the largest investment ever made in the Australian fertiliser industry. The $6.4bn will adopt clean technologies such as solar energy and green hydrogen to support the provision of food security for up to 90 million people.

Another example is the big plans of UAE-based property developer Arada, which has announced a $2.5bn investment in Australia’s housing market. Starting with projects in Sydney’s Castle Hill, Arada plans to build 2500 homes and incorporate green and retail spaces. Arada’s venture into Australia further highlights the deepening trade corridor between the two nations.

Unsurprisingly, the UAE ranks as Australia’s largest trade and investment partner in the Middle East, a market of around 58 million consumers with a combined GDP of $1.4 trillion.

Two-way bilateral trade is today worth $9.9bn and investment flows stand at $20.6bn, with both expected to rise significantly.

Having been in Australia for 60 years, and the UAE for 66, Standard Chartered has watched the relationship develop closely since diplomatic ties were established on March 10, 1975.

In recent years we have seen a steadily growing trade flow between Australia and the UAE, and Standard Chartered is increasingly providing LC cover, guarantee issuance and bill discounting against the big four local banks. We have also witnessed increasing interest in cross-border investment from both sides.

We see the unique opportunities. Australia and the UAE share similar ambitions. Both want to diversify and decarbonise their economies and create jobs.

The UAE, with its open market access and ease of doing business, acts as a regional food trans-shipment hub.

This explains why 30 Western Australian food and beverage companies participated at food exhibition Gulfood, under the Western Australian pavilion.

Murdoch and Curtin, two Western Australian universities, have campuses in Dubai specialising in agriculture, food security, health and advanced technology. The space industry is another area of mutual interest.

The UAE Space Agency is pioneering deep rover missions to areas such as the Asteroid Belt. These journeys of scientific discovery can now draw on WA’s world-leading capabilities in remote operations, automation and ultra-low bandwidth satellite communication.

As the pilots completed final preparations for the 1500-feet Sydney Harbour flyover back in 2013, they would have surely been amazed to know that just 11 years later a new trade agreement really is set for takeoff.

Jacob Berman, is CEO and client coverage head of Standard Chartered Australia.