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CEPA initiative: UAE strengthens global trade hub status
The landmark initiative drives UAE’s economic diversification strategy and strengthens its foreign trade with key partners
- PUBLISHED: Fri 29 Aug 2025, 10:00 AM
The Comprehensive Economic Partnership Agreement (CEPA) looks set to revolutionise the UAE’s foreign trade and economic relations with friendly nations and influential regions by reducing tariffs, eliminating barriers, and creating opportunities for collaboration in key sectors.
With 28 nations already signing on, the CEPA initiative aims to foster strong economic partnerships and drive sustainable growth as part of the country’s strategy to enhance its trade relations and economic diversification. The initiative, which contributes more than Dh135 billion to the UAE’s non-oil trade with partner nations, is poised to strengthen the UAE’s position as a global trade hub as the emirate has a strategic geographical location that provides access to lucrative markets in Asia, Europe, and Africa.
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As many as 11 agreements have already been implemented and yielding benefits while 14 are currently undergoing technical or ratification procedures and talks with Armenia, Morocco and Philippines are concluded on positive note.
In 2025, the UAE signed seven CEPAs with Malaysia, New Zealand, Kenya, Ukraine, the Central African Republic, the Republic of Congo and Angola, expanding its global trade network and creating new opportunities for its private sector across fast-growing economies worldwide.
As part of its strategy, the UAE has signed CEPAs with Angola, Australia, South Korea, Malaysia, New Zealand, Chile, Colombia, Kenya, Ukraine, Vietnam, Central African Republic, The Republic of Congo, Eurasia, Belarus and Azerbaijan, but these are yet to be implemented. Talks with Japan, Pakistan and other trading partners are also at advance stage and deals are likely to be signed in near future.
The CEPA deal with New Zealand, which was signed in January 2025, became effective on August 27 and will lift bilateral trade to $5 billion by 2032 compared to $1.5 billion during the period of 2019 to 2023. The deal represents New Zealand’s first trade agreement with a Middle Eastern nation, signifying a crucial step in enhancing economic ties with the region.
Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of Foreign Trade, said the ratification of the UAE-New Zealand CEPA marks a historic milestone in our economic partnership, fostering innovation and sustainable growth for mutual benefit.
“This agreement not only enhances our trade relations but also opens new avenues for investment and private sector collaboration in key sectors such as food production, education, renewable energy, and advanced technologies," he said.
Dr Monica Malik, Chief Economist at Abu Dhabi Commercial Bank, reposes full confidence in the remarkable initiative of the UAE government and said it would not only boost foreign trade of the country but also strengthen gross domestic product of the country.
“We see the CEPAs are very positive for the UAE's economic outlook. They will help to strengthen the UAE's global integration, at a time of rising uncertainty, building its role as a trade and business hub,” Dr Malik told BTR.
She said the impact of the CEPA's are magnified with broader reforms to strengthen the business environment, alongside the advanced infrastructure.
“We also see the CEPAs as an important factor at attracting businesses and capital to the UAE,” she said.
Boosting Fostering trade
The UAE is strategically positioned as an economic hub that fosters international trade and investment through CEPAs. It aims to achieve $1.1 trillion (Dh4 trillion) non-oil foreign trade by 2031 as part of its strategy to diversify its economy and reduce reliance on oil. In 2024, the UAE’s non-oil foreign trade registered 14.6% year-on-year growth and climbed to record $816.7 billion (Dh3 trillion).
Latest data indicates that the UAE has significantly enhanced its economic landscape through CEPA with countries like India, Israel, Turkey, and Indonesia. These agreements foster stronger trade ties, reduce tariffs, and promote investment, creating a more interconnected economic ecosystem.
The CEPA with India, for instance, aims to increase bilateral trade to $100 billion within five years, enhancing sectors such as technology, agriculture, and services. The deal, which was signed in February 2022 and became effective in May 2022, accelerated non-oil trade 20.5% while the UAE exports to India surged 75% in 2024.
Similarly, the UAE-Israel CEPA has opened avenues for collaboration in technology and tourism, resulting in a significant growth in bilateral non-oil trade. Both nations set $10 billion trade target by 2030.
The agreement with Turkey, which became effective in September 2023, is pivotal for diversifying trade, targeting industries like textiles, food, and machinery, while promoting mutual growth in tourism and investment. Bilateral non-oil trade, hovering around $19 billion, is projected to hit $40 billion in next five years.
Moreover, Indonesia, being a key ASEAN player, presents significant potential through its CEPA with the UAE, enhancing access to Southeast Asian markets and boosting sectors like halal products, technology, and renewable energy. Both nations have set the $10 billion non-oil trade target in next five years after implementing CEPA in September 2023. Currently, both nations bilateral trade stood firm at approximately $4 billion annually.
Overall, these CEPA agreements position the UAE as a strategic hub for trade and investment, fostering economic resilience and driving growth in a rapidly changing global landscape. They unlock opportunities for businesses and elevate the UAE’s role as a central player in international trade.
Enhancing competitiveness
The increased trade flow resulting from CEPA is expected to enhance the UAE's competitiveness in attracting global investments and businesses seeking to leverage the region’s growing economic potential. By engaging a broad spectrum of nations, the CEPA aims to open new markets for UAE businesses and attract foreign investments.
The CEPA initiative encompasses diverse sectors, including trade, investment, innovation, sustainable development, and technology. It targets specific industries such as renewable energy, technology, healthcare, agriculture, and logistics. Moreover, digital economy agreements, targeting sectors like e-commerce and fintech, could position the UAE as a leader in the digital landscape of the Middle East.
As more countries join the CEPA initiative, the complexity and scope of trade agreements may expand, leading to more diversified trade partnerships. This could transform the UAE into a central node for international trade, with comprehensive supply chains that cater to various global markets.
“CEPA deals are aligned with the ‘We the UAE 2031’ Vision, aiming to reduce trade barriers, attract foreign investment and support the country’s economic diversification strategy by promoting its non-oil trade with key trading partners,” according to an analyst.
“By attracting foreign investment and encouraging domestic industries to engage in international markets, the UAE can reduce its dependence on oil revenues, fostering a more resilient and sustainable economy. This alignment with global market trends and increased competitiveness will ultimately contribute to a more dynamic and diverse economic landscape,” he said.
A Growth Catalyst
Rajeev Kakar, Corporate Board Member, Entrepreneur, Founder of Dunia Finance, Global Co-founder of Fullerton Financial Holdings, and former Citibank CEO of the Turkey-MEA region, said the CEPA is a game-changer for the UAE, signaling a significant strategic shift.
“Instead of relying heavily on hydrocarbons, the country is now focused on diversifying its economy and establishing itself as a rules-based global trade hub. This strategy aims to firmly embed the nation in existing and future global supply chains,” Kakar told BTR.
By establishing modern trade agreements, he said CEPA acts as a vital growth catalyst and a source of credibility in a world experiencing rapidly shifting global supply chains for both physical goods and digital assets.
“CEPA is highly strategic because its well-negotiated agreements facilitate trade by reducing friction between markets. It helps harmonise standards, simplify customs procedures, and create predictable frameworks for services and investments. This collective effort fosters an environment where businesses feel secure enough to expand. Ultimately, this enhances the UAE's competitiveness as a global trade hub, attracting long-term foreign direct investment (FDI) and driving private-sector growth.”
To a question Kakar said CEPA is bound to attract more countries willing to expand trade and economic relations with the UAE. “Yes, absolutely. The momentum is strong. Many nations now view the UAE as a gateway to capital and connectivity due to its prime geographical location and robust logistics ecosystem, making CEPA partnerships very attractive,” he said.
“In the current era of trade wars and tariffs, global trade is becoming fragmented. The UAE’s agile and business-friendly approach to bilateral agreements is a refreshing alternative, and I expect many more major and emerging economies will actively work to finalise similar agreements,” he added.
Kakar sees no challenges for CEPA ahead and said this initiative is bound to revolutionise UAE’s bilateral economic relations with friendly nations, influential regions and trade blocs.
“From a demand standpoint, I see no challenges for CEPA. The UAE’s strategic advantages as a global trade hub and the government’s pragmatic approach to designing these agreements are strong assets. However, geopolitical and macroeconomic issues could pose headwinds,” he said.
Factors like rising protectionism, increasing geopolitical rivalries, and regulatory misalignments between economies present potential challenges. “Still, I don’t expect these headwinds to derail the UAE's efforts. The country’s diversification strategy inherently mitigates these risks by promoting trade across multiple partners and sectors, which creates a cushion against global ambiguity and volatility,” Kakar said.
Overall, according to the experts, existing and potential CEPA deals indicate a forward-thinking approach, addressing global economic shifts and harnessing new opportunities for trade and investment. This strategy not only enhances the UAE's economic resilience but also elevates its global standing as a pivotal player in international commerce.
