The European Union and the United Arab Emirates (UAE) have officially launched negotiations for a bilateral free trade agreement, opening the door to the first comprehensive trade deal between the EU and the Gulf region.

The European Union and the United Arab Emirates (UAE) have officially launched negotiations for a bilateral free trade agreement, opening the door to the first comprehensive trade deal between the EU and the Gulf region.

President of the European Commission, Ursula von der Leyen, and His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates, agreed on 10 April to begin negotiations for a free trade agreement. Today in Dubai, EU Commissioner for Trade and Economic Security Maroš Šefčovič and UAE Minister Thani bin Ahmed Al Zeyoudi reaffirmed their joint ambition to reach a commercially beneficial agreement. They agreed on a roadmap, with substantive negotiations scheduled to begin as early as June.

President von der Leyen stated: “The launch of EU-UAE trade talks is an important milestone. We are now working together to conclude an agreement that benefits our people and businesses, bringing us closer in a spirit of cooperation. Such an agreement would strengthen the relationship between the EU and the Gulf region and create new opportunities for European businesses, while deepening our cooperation in areas that matter to EU citizens – such as renewable energy and digital technologies.”

The initial rounds of negotiations will focus on reducing tariffs on goods and facilitating trade in services, digital trade, and investment flows. The discussions will also explore ways to boost trade in strategic sectors, such as renewable energy, green hydrogen, and critical raw materials. This aligns with the shared objective of the EU and the UAE to transform their economies towards green and digital transitions, while enhancing their broader economic security.

There is strong potential for trade, investment, and cooperation between the EU and the UAE in advanced sectors such as renewable energy, digital technologies, artificial intelligence (AI), fintech, space technologies, advanced machinery, healthcare, logistics, infrastructure development, and sustainable food systems. An agreement with the UAE would further strengthen the EU’s existing network of 44 trade agreements with 76 countries – the largest network of its kind in the world.

Background

Trade in goods between the EU and the UAE amounts to approximately €55 billion annually, making the UAE the EU’s 19th-largest trading partner. Trade in services reaches around €39 billion, ranking 11th. The UAE is the EU’s leading export destination in the Gulf region for both goods and services, and the EU’s top partner for foreign direct investment in the region. EU exports to the UAE have risen by 15% in the past year and by more than 48% since 2019. Total EU investment in the UAE has now reached €186 billion.

UAE exports to the EU primarily consist of oil, gas, and base metals. The EU, in turn, exports cars, machinery, chemical products, foodstuffs, and increasingly also green technologies to the UAE. UAE import tariffs are currently highest on tobacco, wines and spirits, and confectionery products.