UAE deal opens options
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Australia has achieved its first free trade agreement with a Middle Eastern nation.
Australia has signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE).
The landmark deal finalised this week is set to significantly enhance Australia’s export potential while expanding trade and investment opportunities across various sectors, particularly agriculture, mining, and education.
The UAE, already Australia’s largest trade and investment partner in the Middle East, accounted for two-way trade worth $9.9 billion in 2023.
The CEPA is expected to further strengthen this relationship by eliminating tariffs on over 99 percent of Australian products, providing Australian businesses with unprecedented access to the UAE market, which includes 58 million consumers and a combined GDP of AU$1.4 trillion.
Australia’s key exports to the UAE, such as meat, dairy, alumina, oil seeds, seafood, and coal, should benefit from the removal of trade barriers.
Trade Minister Don Farrell says the agreement will provide “real benefits for Australian farmers and food producers”, with projected tariff savings of $50 million per year for food and agricultural exports.
These savings will be part of a broader $135 million annual reduction in tariffs in the first year, rising to $160 million per year once fully operational.
This is expected to drive an increase in Australian exports to the UAE by an estimated $678 million annually.
The CEPA is also designed to facilitate investment and services trade, with significant implications for Australia’s higher education sector.
Education is Australia's largest services export, valued at $50 billion, and the UAE has long been an important market for Australian educational services.
The agreement guarantees 100 percent foreign ownership for Australian education providers in the UAE, unlocking new opportunities for Australian universities to expand their presence in the region.
Currently, three Australian universities operate campuses in the UAE, and the CEPA agreement is expected to deepen these ties.
Universities Australia Chief Executive Officer Luke Sheehy welcomed the agreement, saying it “holds enormous potential for Australian universities”, particularly in growing educational exports and fostering international research collaborations.
He highlighted key areas for collaboration, including renewable energy, digital technology, and innovation - sectors vital to Australia’s goal of transitioning to a net zero economy.
The agreement is also set to increase skilled labour mobility, allowing Australian professionals in fields such as education, research, health, and financial services to work more easily in the UAE.
This should not only facilitate knowledge exchange but will also help Australian universities strengthen research collaborations in cutting-edge fields.
For instance, the CEPA includes provisions for cooperation in areas such as green energy, artificial intelligence, and sustainable agriculture, opening up avenues for universities to collaborate with UAE institutions on projects that align with both countries’ economic and environmental goals.
Another significant aspect of CEPA is its inclusion of a chapter dedicated to First Nations trade, the first of its kind in an Australian free trade agreement.
This provision will provide preferential access for Indigenous businesses exporting unique products, such as bush foods and skincare, to the UAE market.
It also establishes a framework for cooperation in cultural sectors, including arts, crafts, and tourism, offering new opportunities for Indigenous knowledge and creativity to reach global markets.
The CEPA also touches on important social and environmental issues.
Both countries say they are committed to promoting labour rights and enhancing animal welfare standards - a significant achievement in a region where animal welfare concerns have been historically challenging.
Some animal welfare organisations have praised the agreement, noting that it sets a global precedent for Middle Eastern nations by recognising animal welfare in international trade.
Australia’s renewable energy sector is expected to benefit from increased UAE investment, particularly in critical minerals needed for Australia’s energy transition.
The agreement provides a framework for two-way investment, particularly in industries that are central to Australia’s goal of becoming a renewable energy superpower.
Minister Farrell noted that the UAE’s sovereign wealth funds, some of the largest in the world, are a key target for investment in Australian energy and infrastructure projects.
For Australian households, the agreement is expected to reduce costs on imported goods from the UAE, such as furniture, plastic, copper wire, and glass containers, with an estimated $40 million in annual savings.
While the Australia-UAE trade agreement promises economic growth, it is worth noting that the UAE's human rights record has historically been a point of contention.
The nation has been criticised for restrictions on free speech, gender inequality, and the treatment of migrant workers, which contrasts with Australia’s public commitments to labour rights and sustainability.
Although the deal includes provisions promoting labour standards and environmental protection, these elements may face challenges in practice, given the UAE’s track record.
Despite these concerns, economic interests have historically outweighed human rights considerations in such agreements, and this deal seems no different, with both governments keen to emphasise the financial and strategic benefits.