Ukraine and the United Arab Emirates (UAE) have signed a Comprehensive Economic Partnership Agreement. The signing took place on 17 February in Abu Dhabi with the participation of President of Ukraine Volodymyr Zelenskyy. The document was signed by Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine, and Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade of the UAE. This is the first agreement in Ukraine’s history with the Gulf countries.

Trade and investment liberalisation

The agreement provides for free trade between Ukraine and the UAE and liberalisation of access to the markets of goods for both countries. Ukrainian goods will have full access to the UAE market for 96.6% of product lines.

“This is a historic event as it is the first agreement in the most economically advanced region of the Middle East. It covers not only the UAE but the entire Gulf region. This is not just an agreement between two countries, it is an entry into the global market, as the UAE is an important economic, trade and financial hub in the Middle East. The implementation of the Agreement, which covers virtually the entire product range of bilateral trade, will increase the production and export of Ukrainian products by removing tariff barriers to trade between the two countries,” said Yuliia Svyrydenko.

According to the Ministry of Economy, the agreement can help maintain a positive balance of trade in goods, which in 2023 amounted to USD 51.5 million. In the medium and long term, it may shift the trajectory of real GDP development by 0.1%.

New business opportunities

The agreement covers not only trade in goods but also services, investment, and the digital economy.

Ukrainian companies will receive:

• simplified access to the markets of the UAE and other countries in the region;
• predictable terms of trade;
• removal of barriers to exports and investment.

Ukrainian exports are expected to grow in key sectors: metallurgy, food industry, in particular flour milling and oil production. Exports of metals and vegetable oil are also expected to grow.

According to Yuliia Svyrydenko, the Agreement is mutually beneficial for both countries. Ukraine and the UAE are competitive in various sectors, so they can complement trade flows between the countries and strengthen each other’s economies.

The parties also agreed to establish the Ukrainian-Emirati Investment Council, which will help increase investment and remove barriers to business. An SME Committee will also be established to provide support to entrepreneurs through training and counselling.

The UAE has lifted the 49% foreign ownership limit for Ukraine, which will allow entrepreneurs to register companies with up to 70% foreign capital, and gradually up to 100% in certain sectors (including commercial services, construction, education, healthcare, and accounting). At the same time, Ukrainian companies will be able to own 100% of a business in free economic zones, which is an important step for the development of Ukrainian business in this region.

The agreement opens up new opportunities for digital trade: duties on digital and electronic data transfer, including electronic content, have been cancelled. It also sets out commitments on digital payments, personal data protection, and the creation of transparent rules for businesses developing the digital economy and cross-border trade.

“Deepening cooperation in trade, investment, technological innovation and infrastructure will be a powerful stimulus for Ukraine’s economy and strengthening of political ties,” summed up Yuliia Svyrydenko.