With the Comprehensive Economic Partnership Agreement signed between Turkiye and the United Arab Emirates (UAE), it is aimed to add a new dimension to the relations between the two countries, from investment and trade to opening up to third countries.
With the signing ceremony held in the presence of President Recep Tayyip Erdogan and President of the UAE Sheikh Mohammed bin Zayed Al Nahyan, the “Comprehensive Economic Partnership Agreement between the Republic of Turkiye and the UAE” (KEOA) was signed on 3 March in Abu Dhabi by Trade Minister Mehmet Mus and UAE Economy Minister Abdullah bin Tavk al-Merri.
According to the information obtained by the AA correspondent from the Ministry of Commerce, agreement negotiations were initiated within the scope of President Erdogan’s visit to Abu Dhabi in February 2022. The negotiations, which were carried out under the chairmanship of Minister Mus, were concluded in a year.
The agreement, which laid the foundations for a new era, was signed on the 50th anniversary of the establishment of diplomatic relations between the two countries.
The UAE is Turkiye’s largest trading partner in the Gulf region, with a bilateral trade volume of approximately $10 billion. Many globally branded Turkish companies in various service sectors, from contracting to gastronomy and logistics, from finance to health, education and tourism, carry out successful works in this country.
While the public affiliates and companies of the UAE are active in many sectors in Turkiye, the number of new investments and commercial cooperations of the UAE in the country is increasing exponentially.
Benefits achieved by the agreement
With the signed KEOA, it is aimed to add a new dimension to the relations between Turkiye and the UAE, which have a deep and comprehensive network of bilateral economic and commercial relations.
Accordingly, it is planned to encourage trade and investment between the two countries by facilitating the development of high-value-added service sectors, facilitating investment processes, increasing economic predictability with efficient practices and cooperation, with KEOA, which includes not only the trade of goods but also all the complementary elements of commercial and economic relations.
With the signed agreement, 80% of all tariff lines were taken into the scope of concessions within the scope of market entry in goods trade, and significant gains were achieved in many sectors, especially automotive, white goods, petrochemical products, textile and carpet, shoe production, plastic products, machinery, and various electronic devices, where Turkiye is in a globally competitive position.
It is envisaged that the agreement will be a powerful instrument in line with the expectations and interests of the two countries by maximizing the bilateral trade volume and mutual investments. In this context, it is aimed that the trade volume between the two countries will reach $25 billion in 5 years.
Trade with all Gulf countries will increase
The agreement is especially important in terms of cooperation with the countries of the region and for Turkiye to obtain expansions towards third countries directly with these countries and new cooperations to be established.
According to the agreement between the two countries, the KEOA will cover trade in goods, trade in services, measures to facilitate trade of small and medium-sized enterprises, public procurement, intellectual property rights, trade measures and other regulatory rules. It will also contribute positively to growth and employment by encouraging the increase of bilateral trade volume, joint investments and development of projects.
With the entry into force of the agreement, an increase in the trade volume between the two countries is foreseen in a short time, while it is expected that trade with all Gulf countries will increase in the medium and long term, and that new productions and projects to be jointly developed will contribute to global value chains.
Foreign trade volume with Gulf countries
While the UAE is Turkiye’s most important trading partner in the Gulf region, $5.2 billion worth of exports were made to this country last year. The trade volume with this country has approached $10 billion. Saudi Arabia came after the UAE. While Turkiye was exporting $1 billion to this country, the trade volume between the two countries was $5.2 billion.
When the share of Gulf countries in Turkiye’s exports is analyzed, the UAE ranked first with a share of 58%. This country was followed by Qatar with a 16% share, Saudi Arabia with a 12% share, and Kuwait with a 7% share. Oman’s share was 5% and Bahrain’s share was 2%.
Consumption goods ranked first in Turkiye’s exports to the UAE with a share of 58.6%, followed by intermediate goods with a share of 30.07% and investment goods with a share of 8.11%. The rate of other goods was 3.22%.
Considering the mutual investments between the two countries, while the total investments made from the UAE to Turkiye from 2002 to the end of November last year amounted to $4 billion 783 million, investments from Turkiye to this country amounted to $1 billion 252 million.
Source: AA / Prepared by Irem Yildiz