The United Arab Emirates and Ukraine have finalized negotiations for a bilateral trade deal, marking a significant step towards boosting economic ties between the two countries. The Comprehensive Economic Partnership Agreement (CEPA) aims to remove or reduce tariffs on a wide range of goods and products, eliminate trade barriers, and facilitate market access for exporters from both sides.
The UAE-Ukraine trade relationship has faced challenges in recent years, particularly following Russia’s invasion of Ukraine in February 2022. Despite Western pressure to isolate Russia, the UAE has maintained a neutral stance due to its strategic alliance with Moscow as an OPEC+ member. However, the decline in bilateral trade between Ukraine and the UAE has been a cause for concern, with non-oil trade dropping to $386 million in 2023 from over $800 million before the conflict.
The CEPA is expected to play a crucial role in supporting Ukraine’s recovery efforts and rebuilding key industries and infrastructure. It will also help strengthen supply chains to the Middle East and North Africa region, particularly for major exports such as grains, machinery, and metals. Ukrainian Minister of Economy Yulia Svyrydenko expressed optimism that the agreement would boost the country’s GDP by 0.1% in the medium to long term.
UAE Minister of State for Foreign Trade Thani Al Zeyoudi highlighted the importance of Ukraine as a gateway for UAE exports to Europe and a key source of imports related to food security. The CEPA is seen as a platform for Ukrainian companies to expand into growth markets in Asia and Africa through the UAE, providing new opportunities for business communities in both countries.
The agreement covers various sectors, including goods, investments, and digital trade, with a focus on boosting exports of metals and vegetable oil from Ukraine. The UAE’s aggressive pursuit of CEPA agreements with multiple countries reflects its commitment to diversifying its economy and increasing non-oil revenue. The country has already signed 11 CEPAs with nations such as Israel, India, Turkey, and Indonesia, among others, and recently initiated talks for a similar agreement with Ecuador.
The UAE’s non-oil foreign trade reached a record high of 3.5 trillion dirhams in 2023, underscoring the country’s growing economic influence on the global stage. The CEPA with Ukraine is expected to further enhance bilateral trade relations and create new opportunities for collaboration in various sectors. As both countries look towards a post-pandemic recovery, the agreement signals a promising future for economic cooperation between the UAE and Ukraine.