Trade

Trade deal signed during UAE state visit to South Korea

May 29, 2024, 9:31 AM

United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan, South Korean President Yoon Suk Yeol and his wife Kim Keon Hee 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. JUNG YEON-JE/Pool via REUTERS — Sheikh Mohamed bin Zayed Al Nahyan and Yoon Suk Yeol watch a display by the South Korean air force during a welcome ceremony in Seoul on Wednesday

Agreements worth billions
Cepa formally signed
Bilateral trade at $21bn in 2023

The UAE has signed a trade agreement with South Korea during a two-day state visit by the Emirati president, Sheikh Mohamed bin Zayed Al Nahyan, that has resulted in deals worth billions of dollars being struck between the two countries.

The UAE has become the first Arab country to formally sign a comprehensive economic partnership agreement (Cepa) with South Korea, which was agreed in October last year.

The deal will mean tariffs on South Korean arms exports are removed, while the UAE has said it will scrap import duty on automobiles over the next decade. At the same time, South Korean tariffs on crude oil imports will be removed.

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Ultimately the Cepa will remove tariffs on more than 90 percent of trade between the two countries.

Bilateral trade between the countries reached nearly $21 billion in 2023.

The UAE president arrived in South Korea on Tuesday to great fanfare during a trip that will also take in the China-Arab States Cooperation Forum in Beijing on Thursday.

“The special bond between the two leaders serves as an opportunity to deepen and advance the two countries’ special strategic partnership,” the office of President Yoon Suk Yeol said in a statement, as quoted by Reuters.

During the first day of the visit, Abu Dhabi National Oil Company signed a letter of intent with two Korean shipbuilders, Samsung Heavy Industries and Hanwha Ocean, to build at least six liquefied natural gas carriers worth around $1.5 billion.

The UAE also reaffirmed its intention to invest $30 billion in South Korea, in nuclear power, defence, hydrogen and solar energy industries, among other sectors.

The funding will be led by sovereign wealth funds including Mubadala Investment Company. It was originally announced during President Yoon’s visit to the UAE back in 2023.

Mubadala also signed a memorandum of understanding with the South Korean Ministry of Economy and Finance to invest $6 billion to expand the investment cooperation framework.

The $32 billion Barakah plant, 140 miles west of Abu Dhabi city, has been developed by Barakah One, a joint venture between Emirates Nuclear Energy Corporation and Korea Electric Power Corporation.

Once operational, Unit 4 will enable the whole plant to generate a quarter of the UAE’s electricity needs for the next 60 years. It is seen as a symbol of the UAE’s growing trade relationship with South Korea.