Vietnam and the United Arab Emirates sign a comprehensive economic partnership agreement to extend trade to $10 billion
Vietnam and the United Arab Emirates (UAE) have entered a brand new phase of economic relations by signing the Comprehensive Economic Partnership Agreement (CEPA) on October 28, 2024 in Dubai.
The agreement was signed by Vietnamese Prime Minister Pham Minh Chinh, Vice President of the United Arab Emirates and Prime Minister Sheikh Mohammed bin Rashid Al Maktoum, marking a historic milestone as Vietnam’s first free trade agreement with an Arab country. The deal is anticipated to spice up bilateral trade to $10 billion and expand cooperation in lots of strategic sectors.
The agreement comes after greater than a 12 months of intense negotiations, demonstrating the determination of each nations to deepen their economic and trade partnership. Under CEPA, Vietnam and the UAE have committed to creating significant business and investment opportunities while supporting each country’s growth goals.
Read also: Vietnam’s explosive economic growth: Southeast Asia’s fastest-growing economy in 2024-2034
CEPA advantages for Vietnam and the United Arab Emirates
One of a very powerful results of the agreement is the commitment of the United Arab Emirates to step by step eliminate tariffs on 99% of Vietnamese products, which can pave the way in which for increased exports of key Vietnamese goods. This includes consumer goods resembling textiles, footwear and electronics, in addition to fisheries and wood products.
Vietnam’s Minister of Industry and Trade Nguyen Hong Dien emphasized that Vietnam’s export sectors will directly profit from the tariff reductions, increasing the competitiveness of Vietnamese products within the United Arab Emirates and the broader Middle East market.
Additionally, Vietnam’s agricultural sector is anticipated to see a positive impact. Agricultural products resembling cashews, pepper and honey – known for his or her prime quality and halal certification – are expected to achieve wider market access within the UAE. The strong demand for clean, organic products within the Middle East provides an enormous opportunity for Vietnamese farmers and producers to showcase their wares.
On the opposite hand, Vietnam has agreed to step by step eliminate tariffs on 98.5% of UAE exports, in a move geared toward further strengthening the flow of bilateral trade. The agreement also goes beyond trade in goods and includes key commitments resembling opening services markets, ensuring transparency in government procurement, and promoting digital transformation and ecological sustainability.
Read also: Contesting Influence: China vs. the United States Geopolitical Dynamics in ASEAN
Encouraging UAE investment in key sectors of Vietnam
Moreover, CEPA is anticipated to draw increased UAE investment in Vietnam, especially in strategic sectors resembling manufacturing, high-tech agriculture and infrastructure.
Thanks to its rapidly growing economy, Vietnam is seen as a possible marketplace for Middle Eastern investors searching for opportunities outside their region. Such investments are more likely to strengthen Vietnam’s position as a producing hub in Southeast Asia.
Read also: 4 fascinating facts about ASEAN’s role in the worldwide economy
Towards a comprehensive partnership
During Prime Minister Pham Minh Chinh’s visit to the United Arab Emirates, he and UAE President Mohammed bin Zayed Al Nahyan agreed to raise bilateral relations to a comprehensive partnership.
This enhancement recognizes the importance of economic and political ties between the 2 nations and underlines their commitment to expanding cooperation in areas resembling digitalization, the transition to green energy, innovation, tourism and culture.
The two leaders also agreed to strengthen dialogue at multilateral levels, supporting one another in various international forums and inspiring exchanges in any respect levels to make sure the effective implementation of CEPA. This is anticipated to soon speed up bilateral trade growth beyond the $10 billion goal
Read also: ASEAN’s strategic advantage: Southeast Asia as the long run epicenter of worldwide growth
Strengthening Vietnam-UAE trade relations
Diplomatic relations between Vietnam and the UAE were established in 1993. Since then, the UAE has turn into a vital partner of Vietnam in West Asia. Currently, the UAE is Vietnam’s largest export market within the region and its second largest trading partner after Kuwait.
In 2023, bilateral trade between the 2 countries reached almost USD 4.7 billion, a rise of 6% in comparison with the previous 12 months. This upward trend will proceed in 2024, and bilateral trade in the primary eight months of the 12 months has already amounted to almost USD 4.5 billion. Vietnam’s exports amounted to $3.85 billion, a rise of 45% in comparison with the identical period last 12 months.
Read also: the fastest growing economy of the Philippines in ASEAN, the second largest in Asia
Future potential
With the signing of CEPA, each Vietnam and the UAE will gain significant opportunities within the international arena. Vietnam, with its strong production base and commitment to sustainable development, and the United Arab Emirates, as a serious trade and investment center within the Middle East, complement one another by leveraging existing economic potential.
In addition to boosting trade in goods and services, the agreement opens up opportunities for each countries to cooperate on global issues resembling the green transition, digital economy and food security.
With effective implementation and powerful commitment from each side, this agreement is anticipated to bring significant advantages to each nations and strengthen their position in global trade.
