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UAE and South Korea forge CEPA agreement to free trade, promote investment

UAE and South Korea forge CEPA agreement to free trade, promote investment

The UAE and South Korea have solidified a Comprehensive Economic Partnership Agreement (CEPA), marking a significant stride towards fostering free trade and encouraging bilateral investment. Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, and Ahn Duk-geun, Minister of Trade, Industry, and Energy of South Korea, formalized this pact in Seoul.

This agreement, part of the UAE’s CEPA foreign trade initiative, aims to propel non-oil foreign trade to over AED4 trillion by 2031. It facilitates tariff removal or reduction, expands market access for exporters, and dismantles trade barriers. Furthermore, the program seeks to establish collaborative platforms for the private sector across nations.

President His Highness Sheikh Mohammed bin Zayed Al Nahyan’s visit to Seoul resulted in the signing of 19 business deals and agreements spanning investment, energy, defense, technology, and cultural exchange.

The UAE and South Korea, in October 2023, agreed on the CEPA, culminating in today’s signing. This agreement will bolster companies and investors by eliminating tariffs and trade hurdles, particularly in sectors like energy, healthcare, advanced industries, smart farms, and bio-economy.

Under this agreement, the UAE will phase out import duties on automobiles over the next decade, while South Korea will remove tariffs on crude oil imports. Over the next ten years, tariffs on more than 90% of imports from both countries will be eliminated. The agreement also includes provisions for opening up cultural services and the online gaming market.

In the realm of climate change cooperation, a framework agreement was signed between the UAE and South Korea. Additionally, several other significant agreements were inked, including a memorandum for South Korea to construct 10 liquefied natural gas (LNG) carriers, worth over $1.5 billion.

The UAE, demonstrating its commitment to robust economic collaboration, also signed agreements related to energy infrastructure development, investment cooperation, joint investment in nuclear power plants, carbon capture and storage, and LPG value chain collaboration.

President Sheikh Mohammed bin Zayed Al Nahyan expressed optimism about the agreement, emphasizing its role in fostering economic growth for both nations. This agreement also marks a historic milestone as the UAE becomes the first Arab nation to forge a free trade deal with South Korea, with plans underway for CEPA agreements with Malaysia, Vietnam, and the Philippines.

Source: Economy Times