In a landmark development, Korea and the United Arab Emirates (UAE) have signed a Comprehensive Economic Partnership Agreement (CEPA) during a summit between President Yoon Suk Yeol and UAE President Mohamed bin Zayed Al Nahyan in Seoul. The agreement is set to significantly enhance bilateral trade and economic cooperation.
The summit, held on the final day of President Mohamed's two-day state visit to Korea, marks the first visit by a UAE president. During the meeting, the two leaders discussed strategies to strengthen their special strategic partnership, focusing on economic and energy sectors. President Yoon highlighted the peak state of bilateral relations, while President Mohamed emphasized the irreplaceable bond between the two nations and expressed a desire to elevate it further.
The CEPA aims to eliminate tariffs on a substantial portion of traded goods between the two countries. Specifically, tariffs will be progressively removed on 92.8% of Korea’s exports and 91.2% of UAE’s exports over the next decade. This agreement marks Korea's first CEPA with an Arab nation and is expected to boost Korea's arms exports, as most of these items will see immediate tariff elimination.
The pact also provides Korean exporters with a competitive advantage over those from the US, EU, Japan, China, and other countries that have yet to establish similar agreements with the UAE. Tariffs on eco-friendly vehicles, such as electric and hybrid cars, will be eliminated within ten years, while duties on commercial vehicles like dump trucks will be lifted immediately, benefiting Korean carmakers amid growing construction demands in the Middle East.
Additionally, the CEPA grants Korea extensive access to the UAE’s online gaming, healthcare, video, and music content markets, marking the first instance of the UAE opening its online gaming market through a free trade agreement.
During the summit, the leaders reaffirmed commitments made during President Yoon's state visit to the UAE last year, including a pledge from Middle Eastern sovereign wealth funds to invest $30 billion in strategic sectors within Korea. This commitment is being actualized through a memorandum of understanding (MOU) between Korea's Deputy Prime Minister Choi Sang-mok and Mubadala Investment Company CEO Khaldoon Khalifa Al Mubarak to establish an investment platform.
Furthermore, Korea’s Samsung Heavy Industries and Hanwha Ocean have signed letters of intent to construct six large liquefied natural gas (LNG) carriers for the Abu Dhabi National Oil Company (ADNOC), with an estimated combined value of $1.5 billion. These projects are expected to be finalized next month.
In energy cooperation, the two countries signed an MOU to expand their joint oil stockpiling project and another MOU on carbon capture and storage to produce clean hydrogen using LNG, enhancing their energy security and supporting hydrogen cooperation projects.
#ITCNewsUpdates #breakingNews #TradeNews #EconomicPartnership #KoreaUAE #BilateralTrade #CEPA #TradeCouncil
