UAE and South Korea agree to strengthen trade partnership - GulfToday

UAE and South Korea agree to strengthen trade partnership

Thani-Al-Zeyoud-and-Yeo-Han-koo

Thani Al Zeyoudi and Yeo Han-koo shake hands after the announcement of the intent between the two nations to pursue a comprehensive economic partnership agreement (CEPA) in Dubai. Reuters

Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, has welcomed an official delegation from South Korea to commence talks aimed at expanding trade and investment relations between the two nations.

Dr Al Zeyoudi and Yeo Han-Koo, South Korean Minister for Trade, met to discuss the prospect of pursuing a Comprehensive Economic Partnership Agreement between the UAE and South Korea to strengthen economic ties, enhance investment opportunities and mark a new era of bilateral cooperation with one of Asia’s most important markets.

The UAE has already started negotiations on two such deals, following the launch of talks with India and Indonesia in September. It underscores the country’s ambition to move fast by striking new trade agreements with high-growth markets in Africa and Asia under a clear social and economic strategy for the next 50 years.

“We are working around the clock to consolidate the UAE’s position as a global trade and logistics hub that connects the world to the broader region and beyond,” Dr Al Zeyoudi said. “South Korea and the UAE are natural trade and investment partners with shared goals to deliver sustainable economic growth. Today’s intention to launch CEPA is a step forward in our vision for a mutually beneficial partnership that creates new jobs and investment opportunities. It reinforces our position as a gateway for goods and services that can flow through Africa, Asia and Europe under an economic blueprint for the next 50 years.”

“UAE is Korea’s Special Strategic Partner in the Middle East and our bilateral pursuit of a Comprehensive Economic Partnership Agreement will upgrade our thriving bilateral partnership to the next level.” Yeo Han-Koo said. “The CEPA would serve as a leverage to further expand bilateral trade and investment. And it would intensify future-oriented cooperation between two countries and serve as a framework for achieving more concrete outcomes from our bilateral collaboration.”

The UAE is South Korea’s largest trading partner in the Arab world, with bilateral trade exchange valued at $9.4bn in 2020. Non-oil trade in the first six months of 2021 has grown to $2.1 billion.

In recent years, foreign direct investment has focused on strategically important national industries, such as renewable and nuclear energy, hydrocarbons, healthcare and logistics.

Prominent projects include the $20 billion Barakah Nuclear Power Plant in Abu Dhabi, with construction led by Korea Electric Power Corporation in a consortium that also includes Hyundai, Samsung, Korea Hydro & Nuclear Power and Doosan Heavy Industries and Construction.

Earlier this year, Mubadala was part of a consortium that acquired a majority stake in South Korean cosmetic pharmaceutical company Hugel for $1.5 billion. While in 2020, South Korea’s NH Investment & Securities joined a group of asset management and sovereign wealth funds to invest $20.7 billion in Abu Dhabi National Oil Company’s midstream assets.

UAE’s non-oil foreign trade up 27%: The UAE’s non-oil foreign trade recorded a 27% growth in H1 2021 compared to H1 2020, indicating a rapid recovery in the country’s non-oil foreign trade and its return to growth trajectory. This also indicates a 6% growth in the country’s non-oil foreign trade compared to the pre-pandemic level in 2019.

According to preliminary data released by the Ministry of Economy, the total value of the country’s non-oil foreign trade amounted to nearly Dhs900 billion in the first half of 2021. The value of non-oil exports alone amounted to Dhs170 billion during this period, posting a growth of 44% compared to the first half of 2020 and 41% compared to the same period in 2019.

The contribution of non-oil exports to the country’s total non-oil foreign trade during the same period (first half of 2021) grew to 19% from 16.6% in 2020 and 14.2% in 2019.

Dr Thani Bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said that the non-oil foreign trade data for the first half of 2021 reveals a significant and promising growth in the total volume of trade over the past two years, despite the pandemic’s impact on the global trade movement. Furthermore, significant growth in non-oil exports is a clear indication of the rapid recovery and the return to the growth trajectory and the overall growth in the country’s foreign trade movement in general and in promoting national non-oil exports particularly.

“These indicators confirm the efficiency of the forward-looking vision and proactive plans implemented by the UAE under the guidance and support of its wise leadership to deal with the pandemic’s impact on the foreign trade sector. It shows the country’s success in developing flexible, open and long-term policies to maintain the attractiveness of its trade and business environment. These efforts consolidate the UAE’s position as a leading and competitive trade hub connecting the East and West and a major player in ensuring the continuity and growth of global supply chains. What we see today is a testament to the success of our efforts in this direction. The latest figures confirm the distinguished position of the UAE as a vital regional and global trade hub and an influential player that contributes to reshaping the global trade landscape to make it more flexible and sustainable with the aim of restoring the pace of activity and growth in the post-Covid era,” Al Zeyoudi added.

Al Zeyoudi added that the country’s promising foreign trade figures coincide with the launch of the ‘Projects of 50,’ which was recently announced by the UAE government to contribute to enhancing country’s trade performance during the next stage. It includes qualitative and strategic initiatives such as comprehensive economic agreements with a number of targeted global markets, and the 10×10 export development programme designed to provide an additional incentive to strengthen the UAE’s comprehensive economic and trade partnerships with countries around the world continuously discover new trade markets for the UAE. He added: “In light of these integrated and pioneering efforts, we expect the country’s non-oil foreign trade to continue its positive performance during the remaining months of the year.”

An analytical study by the Ministry of Economy on the preliminary data of non-oil foreign trade activities revealed that the value of UAE’s gold exports exceeded Dhs70 billion in H1 2021. It shows a growth of 48% compared to H1 2020, while the rest of the non-oil exports except gold totaled Dhs98 billion with a growth of 42% compared to H1 2020 and 20% compared to H1 2019. It also revealed that 87% of the country’s non-oil exports are locally made and that 13% come from free zones and customs warehouses.

Gold, ornaments and jewellery; aluminium; plastics, copper and articles thereof; iron and steel and articles thereof; are the five most important non-oil exports of the country. Their total value witnessed a growth of 50% in the first half of 2021 compared to the first half of 2020, and 47.4% compared to the same period in 2019.

Re-exports, which totaled Dhs238 billion in the H1 2021, witnessed a growth of 22% compared to the same period in 2020. Furthermore, 46% of the re-exports are from the local market and 54% from free zones.

The total value of imports during the same period exceeded Dhs482 billion indicating a growth of 24% compared to H1 2020 and 3% compared to H1 2019. Up to 66% of the imports go to the local market and 34% to free zones and customs warehouses.

The study conducted by the Ministry further indicated that with regard to the total non-oil trade of the country, 65% of it is with the local market, while free zones and customs warehouses account for the remaining 35%. The study also showed that 46% of this trade takes place by air, 35% by sea, and 20% by land.

The country’s non-oil trade significantly grew with the five fastest growing economies in the first half of 2021 compared to the same period in 2020. These are China, Saudi Arabia, Iraq, Turkey and Italy. Meanwhile, the country’s top five export destinations during the same comparison period include India, Saudi Arabia, Hong Kong, Kuwait and China. The UAE’s top re-export partners include Saudi Arabia, Iraq and Egypt.

WAM

Related articles