UAE, South Korea look to buck protectionist wave with trade deal

The United Arab Emirates reached an agreement with South Korea to bolster bilateral commerce, adding Asia’s fourth-largest economy to a growing roster of nations to close trade deals with the wealthy Gulf state. 

Signed during UAE President Sheikh Mohammed bin Zayed’s visit to South Korea this week, the pact — known as a Comprehensive Economic Partnership Agreement — is part of the Arab country’s effort to grow its non-oil foreign trade to over $1 trillion by the end of the decade

It’s already inked similar agreements with India, Indonesia, Turkey and Ukraine, among others. The latest deal will aim to alleviate or remove tariffs on such products as energy and health care, according to a statement published on Wednesday. 

The accord stands out amid a rising tide of protectionism and tensions among the world’s biggest economies. The Biden administration announced this month it’s reimposing tariffs on hundreds of goods imported from China and has moved to quadruple US duties on Chinese electric vehicles. 

The European Union launched a probe of China’s EV industry last year and is nearing a decision on raising levies. China, meanwhile, has signaled it’s ready to unleash tariffs as high as 25% on imported cars with large engines.

The UAE has tried to position itself as a neutral power broker that’s doing business with developing nations while also pursuing ties with the West. Its overall non-oil trade reached an all-time high of more than $700 billion last year.

The agreement “underscores our shared commitment to free and fair trade, a commitment that is more important now than ever before,” South Korea’s President Yoon Suk Yeol said. “In an era marked by uncertainty and volatility, it is imperative that nations come together to uphold the principles of openness, inclusivity, and cooperation.” 

The UAE’s partnership with South Korea is part of outreach to Asia by Middle Eastern countries. Alongside heads of state from Egypt, Bahrain and Tunisia, the UAE leader will meet Chinese President Xi Jinping during the China-Arab States Cooperation Forum in Beijing on Thursday.

Sheikh Mohammed, who’s also the ruler of Abu Dhabi, was accompanied on his visit to South Korea by several ministers who oversaw the signing of several memorandums of understanding. 

They ranged from agreements on energy infrastructure and building nuclear power plants to letters of intent to build ten new LNG vessels worth over 9 billion dirhams ($2.5 billion) between Adnoc Logistics & Services, Samsung Heavy Industries and Hanwha Ocean. 

Non-oil trade between the two countries reached a record $5.3 billion last year, according to the statement, with the UAE becoming South Korea’s second-largest trade partner in the Arab world and accounting for 20% trade with the region.

The agreement will seek to accelerate foreign direct investment between the two nations and aim to attract talent and promote entrepreneurship, according to the statement.