The European Union (EU) and the United Arab Emirates (UAE) have officially begun negotiations for a bilateral free trade agreement. This marks the potential establishment of the first comprehensive EU trade deal within the Gulf region.
European Commission President Ursula von der Leyen and UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan initially agreed to commence these negotiations on April 10. The formal announcement was made in Dubai, where Commissioner for Trade and Economic Security Maroš Šefčovič and UAE Minister Thani bin Ahmed Al Zeyoudi confirmed their commitment to achieving a mutually beneficial agreement. They also established a roadmap with substantial work set to start in June.
President von der Leyen stated, “The launch of EU-UAE trade talks is an important milestone. We will now work together to seal a deal that can benefit our peoples and businesses, bringing us closer together in a spirit of cooperation. Such an agreement would help strengthen ties between the EU and the Gulf region, offering new opportunities for EU businesses while bolstering our partnership in areas that matter to EU citizens like renewable energy and digital technologies.”
Initial discussions will focus on reducing tariffs on goods, facilitating services, digital trade, and investment flows. Negotiations will also consider boosting trade in strategic sectors such as renewable energy, green hydrogen, and critical raw materials. These efforts align with both regions’ goals of economic transformation towards green and digital transitions while enhancing broader economic security.
There is significant potential for collaboration between the EU and UAE in advanced sectors like renewable energy, digital technologies including artificial intelligence (AI), Fintech, space technologies, healthcare, logistics, infrastructural development, and sustainable food systems. A successful agreement would expand the EU’s existing network of 44 trade deals with 76 countries.
Currently, EU-UAE trade in goods amounts to EUR 55 billion annually (making the UAE its 19th trading partner), while services account for EUR 39 billion (ranking as 11th). The UAE stands as the EU’s leading export destination for goods and services within the Gulf region and its primary foreign direct investment partner there. Notably, EU exports to the UAE have increased by 15% since last year and over 48% since 2019. Meanwhile, EU investments in the UAE have reached EUR 186 billion.
UAE exports to Europe primarily include oil, gas, and base metals; conversely, key European exports consist of motorcars, machinery, chemical products, foodstuffs—alongside growing contributions from green technologies. Currently highest tariffs are imposed by UAE on tobacco products along with wines & spirits plus confectionery items.
