EU and UAE to Begin Free Trade Agreement Talks

Image Source – EU in the UAE’s Facebook Page

According to the EU official website, President von der Leyen held a constructive phone conversation with the UAE’s President, Sheikh Mohamed bin Zayed Al Nahyan, to initiate negotiations on the EU-UAE free trade agreement. This development represents a significant step forward in EU–UAE relations and, alongside broader Strategic Partnership Agreements, has the potential to strengthen ties between the EU and the Gulf Cooperation Council (GCC).

President von der Leyen highlighted the EU’s strong record in forging high-standard trade agreements rooted in open markets and mutual benefit. The upcoming EU-UAE free trade agreement negotiations will aim to liberalise trade in goods, services, and investment, while also expanding cooperation in strategic areas such as renewable energy, green hydrogen, and critical raw materials.

She expressed confidence in the ability of both parties to move forward swiftly and ambitiously. Commissioner Maroš Šefčovič is expected to return to the UAE soon to advance the discussions. A modern and ambitious trade agreement will not only deepen EU-UAE relations but also support broader regional growth and prosperity. On similar lines, a delegation of UAE leaders visited Belgium last month to strengthen trade and investment ties and foster investment opportunities between the EU and the UAE.

EU-UAE Trade Relations

The EU remains the second-largest global trade partner of the UAE, with non-oil trade reaching $67.6 billion in 2024. It marks a 3.6% increase from 2023 and a rise of 18.1% from 2022. The contribution of the EU to the UAE’s total non-oil foreign trade now accounts for 8.3%.

Furthermore, the ongoing trade discussions between Europe and the UAE, including Comprehensive Economic Partnership Agreements (CEPA), are paving the way for a more seamless business environment. As a result, for the first time, the UAE foreign trade surpassed Dhs 3 trillion in 2024. The UAE’s strategic position serves as a gateway to the Middle East, Africa, and South Asia, offering attractive incentives to European SMEs for expansion in the Gulf region. 

Recently, Italy and the UAE finalized a $40 billion agreement to strengthen economic ties and reinforce their strategic partnership. The investment plan between Italy and the UAE aims to bolster the Italian economic landscape and solidify its role in industries like artificial intelligence, energy, and telecommunications.

International Expansion for European SMEs

European SMEs looking to expand internationally should strongly consider Dubai and the UAE. With a dynamic business environment, investor-friendly policies, and a positive economic outlook, the UAE stands out as a leading destination. Its dedication to innovation and sustainability further enhances its appeal, making it an increasingly attractive market for European companies in the years ahead.

Research Konnection – As a leading market research company in the UAE, we support European SMEs in successfully entering the UAE market. Get in touch to discover how our customized market entry strategies, in-depth market insights, and business planning services can support your expansion goals.