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India's invitation to the UAE and Oman was a reflection of how much the Gulf matters to India, for both economic and strategic reasons
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UAE trade gets a boost with Cepa
While trading with blocs may seem impressive and grab media headlines, pacts like Cepa among friendly countries are more effective and bear quick results
Comprehensive Economic Partnership Agreements (Cepa) signed by the UAE herald a new era in bilateralism and, more importantly, in free trade and investments between countries who want to grow rapidly while keeping in mind national interests at heart. There were hard lessons to learn from the pandemic which caused a great disruption in global supply chains. Over-reliance on some countries or political and economic blocs meant that supply chains were hit as the world closed down, and countries needed to look elsewhere for goods. Industrial production slowed or shut down, albeit temporarily until parts of the world reopened.
Bilateral trade pacts like Cepa that the UAE has signed with three countries after the world reopened do not mean globalisation is in crisis. Instead, it redefines a globalised economy where countries can forge new trade ties on their own sans the bureaucracy. In other words, this is globalisation simple and direct between two countries who see potential in each other's capabilities while leveraging the inherent strengths of their economies.
The UAE realised it needs a head start as the pandemic ebbed. Economic diversification was already underway and growth targets were set for 2030 - to become a Dh3 trillion economy, and comprehensive bilateral trade deals were the answer to the UAE’s ambitious economic goals. It concluded a landmark Cepa with India in just 88 days. A similar pact with Israel followed on the back of the landmark Abraham Accords. Indonesia soon came on board.
Turkey is the latest to sign such a pact with the UAE. Twenty-three Cepas are in the works, according to UAE officials. While trading with blocs may seem impressive and grab media headlines, pacts like Cepa among friendly countries are more effective and bear quick results. Removal of trade barriers through these bilateral deals opens up new markets for the UAE and its products. It’s a win-win for geopolitics and makes economic sense in a polarised world.
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