The United Arab Emirates and Australia have secured a new free trade agreement (FTA), which will facilitate UAE investment into Australia.
Negotiations on the Australia-UAE Comprehensive Economic Partnership Agreement concluded on September 17, marking a new era of trade and investment between the two countries.
The FTA is a significant boost for trade between the two countries, allowing over 99% of Australian products to enter the UAE tariff-free.
Major win for investment
The FTA is expected to increase bilateral investment between Australia and the UAE, which totalled $20.6 billion in 2023.
“The UAE has some of the largest sovereign wealth funds in the world,” says Federal Trade Minister Don Farrell.
“A trade agreement with the UAE will facilitate investment, which is important to achieving the Albanese Government’s ambition of becoming a renewable energy superpower.”
The agreement includes a framework to encourage two-way investment, including in sectors that underpin Australia’s energy transition, such as critical minerals.
Strengthening ties with a key trade partner
Two-way trade between the UAE and Australia was valued $9.9b in 2023, making the UAE Australia’s largest trade and investment partner in the Middle East.
The Middle East market has about 58 million consumers and a combined gross domestic product (GDP) of A$1.4 trillion.
Key Australian exports to the UAE include alumina, meat, dairy, oil seeds, seafood, steel, canola seeds, nuts, honey, coal, chickpeas, lentils and higher education.
The agreement will also benefit Australian importers, with tariffs to be cut on UAE-produced furniture, copper wire, glass containers and plastic.
Australian households and businesses are estimated to save around $40m a year.
Australia and the UAE are now both working to formalise the legal treaty text in preparation for signing later this year.
