New UAE, Australia trade deal bucks protectionist trend

The UAE’s reputation as a logistics hub, including through ports such as Jebel Ali, makes it an attractive trade gateway for Australian business. Picture: Bloomberg

In recent months, the subject of tariffs and trade, as well as the ­rising spectre of protectionism, has dominated global media ­discourse.

Indeed, these were reported to be topics of discussion among participating countries at the recently held G20 gathering in Rio de Janeiro. When viewed objectively, it appears the world is undergoing a decided shift away from globalisation.

However, the UAE and Australia are demonstrating otherwise.

We can learn a lot from each other. During my post, I’m delighted to say I have become a fan of Australian rules football as one of the world’s most spectacular sporting games. Attending the last AFL grand final has been a highlightand, while it didn’t produce a close result, it reinforced the idea of an open playing field and rules-based competition. Aussies, as I have come to know, love to play hard but fair.

In November, during a historic visit to Australia by His Highness Sheikh Abdullah Bin Zayed Al Nahyan, the UAE’s Deputy Prime Minister and Minister of Foreign Affairs, the UAE-Australia Comprehensive Economic Partnership Agreement was signed by Thani Al Zeyoudi, the UAE Minister of State for Foreign Trade, and senator Don Farrell, Australia’s Minister for Trade and Tourism and Special Minister of State.

Notably, the signing of this landmark trade agreement ­cemented a series of historic firsts.

The CEPA is Australia’s first free trade agreement with a Middle Eastern country – a fitting and logical strengthening of Australia’s largest trade and investment relationship in the region.

The agreement also represents a triumph of momentum and goodwill, being one of the fastest free trade deals ever concluded from the opening of discussions to its signing; and it’s noteworthy for acknowledging and including the role of First Nations Peoples in its vision.

The speed at which this agreement was reached is testament to the trust and strength of relations between our two countries.

Between January and May last year, high-level engagements between the two nations underscored their deepening ties, with notable visits including Australia’s Deputy Prime Minister, Richard Marles, travelling to the UAE, and Reem Al Hashimy, Minister of State for International Co-operation, making an official visit to Australia.

The CEPA is unquestionably ambitious. It has paved the way to break down many barriers with the Promotion and Protection of Investments Agreement, something that both nations have been working on for many years.

CEPAs are a key part of the UAE’s long-term strategy to ­diversify its economic connections and strengthen international partnerships across trade, industry and investment. By establishing CEPAs with strategic partners, the UAE is paving the way for new economic opportunities, particularly in digital and traditional trade. The UAE signed 11 CEPAs so far with six of them ­entered into force.

These agreements facilitate faster and easier access for goods traded by sea and air, while unlocking the potential of digital trade, cross-border data flows, and blockchain. The CEPA with Australia, for instance, supports global trade liberalisation by removing tariffs on more than 99 per cent of Australian exports to the UAE, further enhancing bilateral trade relations.

Australian farmers, producers, manufacturers, service providers, exporters and workers stand to reap the benefits from preferred access and increased exposure in fast-growing markets. The agreement also cuts Australian import tariffs on UAE-produced furniture, copper wire, glass containers and plastic which is estimated to save Australian households and businesses about $40m a year.

The UAE and Australia shared more than $9.9bn in two-way trade and $20.6bn in two-way investment in 2023. The agreement has the potential to deliver an annual $687m boost to Australian exports to the UAE.

The agreement also locks in greater certainty and preferred market access for Australian service providers in more than 120 sectors seeking to do business in the UAE, including professional services and financial services and education.

The UAE is particularly proud of the commercial opportunities that may emerge as a result of Australian First Nations exporters receiving preferential market ­access to the UAE.

The UAE’s global reputation as a logistics hub – through ports like Jebel Ali and its comprehensive aviation network – makes it an attractive trade gateway for Australian businesses seeking to access the broader Middle Eastern, North African and Asian markets.

The UAE and Australia have created a unique opportunity to share knowledge and collaborate on addressing the global energy crisis. By combining our respective expertise and resources, we can accelerate the global transition to clean energy.

Australia’s expertise in solar energy, wind power and energy efficiency is strongly aligned with the UAE’s vision for a sustainable future, creating new opportunities for joint investments in clean energy projects, research and innovation. The UAE’s credentials as a leader in climate action and sustainability were highlighted by its successful hosting of COP28, where the landmark UAE Consensus was signed, marking a new era in global climate collaboration. The UAE’s support for COP29 further reinforces its commitment to global climate action.

As the UAE Ambassador to Australia, I regard this CEPA as one of the most historic achievements achieved by our two nations. But it is just the beginning. I look forward to the ratification of the agreement and working with Australian businesses to maximise the benefits of the CEPA.

Fahad Altaffag is the United Arab Emirates ambassador to Australia