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South Korea, UAE ink trade deal lifting tariffs on over 90% of imports

The agreement was signed by ministers at a summit in the capital Seoul during the UAE president's first state visit.
United Arab Emirates' President Sheikh Mohamed bin Zayed Al-Nahyan (L), South Korea's President Yoon Suk Yeol (C), and his wife Kim Keon Hee (R) watch the Black Eagles, the aerobatic team of T-50 jets belonging to South Korea's air force, during a welcoming ceremony at the Presidential Office in Seoul on May 29, 2024. (Photo by JUNG YEON-JE / POOL / AFP) (Photo by JUNG YEON-JE/POOL/AFP via Getty Images)

The United Arab Emirates and South Korea signed a trade deal on Wednesday that removes tariffs on more than 90% of all imports between the two countries over the next decade.

The Comprehensive Economic Partnership Agreement (CEPA) also aims to strengthen business and investment ties between the two countries. It makes the UAE the first Arab nation to sign a free trade deal with South Korea, the country's Yonhap news agency reported.

The agreement was signed at a summit in the capital Seoul by UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi and Korean Minister of Trade, Industry and Energy Ahn Duk-geun. UAE President Sheikh Mohammed bin Zayed Al Nahyan also attended the event, marking his first official visit as leader of the Gulf country since he assumed power in 2022.

Sheikh Mohammed arrived in South Korea Tuesday on a state visit intended to further economic and defense ties between the two nations. Last year, Yoon made a state visit to Abu Dhabi.

On Wednesday, the UAE president met with his South Korean counterpart, Yoon Suk Yeol, to discuss defense industry cooperation, business and investment as well as energy initiatives. The previous day, Sheikh Mohammed met with several of South Korea’s top business leaders from companies including Samsung Electronics, Hyundai Motor Group and SK Group to discuss ways to enhance cooperation in the fields of advanced technology, defense and energy.

Overall, Sheikh Mohammed’s visit led to the signing of 19 business deals and agreements in investment, energy, nuclear power, defense, technology, climate change and cultural exchange, Yonhap reported.

Among them was a memorandum of intent for South Korea to build six liquified natural gas carriers worth $1.5 billion in a deal between ADNOC L&S, Samsung Heavy Industries and Hanwha Ocean.

Sheikh Mohammed said in January 2023 that his country's sovereign wealth fund would invest $30 billion in South Korea and reaffirmed that commitment during this visit.

The CEPA between the two countries was agreed in October, according to the Asian country's Ministry of Trade, Industry and Energy.

The UAE is a major supplier of crude to South Korea, providing the country with 11% of its total oil needs. Oil is among the goods impacted by tariffs that the CEPA will eliminate. 

Bilateral trade between the UAE and South Korea reached nearly $21 billion last year.

Non-oil trade

The UAE is looking to boost its non-oil trade to 4 trillion dirhams ($1.09 trillion) by 2031 by signing a series of CEPA agreements and investing in multiple sectors. It is looking to sign CEPAs with Malaysia, Vietnam and the Philippines in the next few months, according to Zeyoudi.

Last year, the UAE's non-oil trade hit a record 3.5 trillion dirhams ($953 million), a 12.6% increase from 2022.

After South Korea, Sheikh Mohammed will head to China, where he is slated to participate in the 10th Ministerial Conference of the China-Arab States Cooperation Forum.