UAE, Ukraine finalize pact aimed at boosting bilateral trade

The United Arab Emirates and Ukraine concluded an economic agreement aimed at increasing their bilateral trade, which has fallen sharply from its pre-war level. 

Non-oil trade between the two countries reached $386 million last year, down from more than $800 million before the Kremlin’s February 2022 invasion of Ukraine, Thani Al-Zeyoudi, the UAE’s minister of state for foreign trade, said in an interview. The fall in trade is not specific to the Gulf nation, and similar trends with Ukraine since the start of the war can be seen across the globe, he said. 

The agreement finalizes a trade pact that was announced two years ago, and is part of the UAE’s goal of growing its non-oil foreign trade with multiple nations. The deal aims to alleviate or remove tariffs on some products, and strengthen supply chains to the wider region for major exports such as grains, machinery and metals, according to a statement on the agreement released Monday. 

Kyiv estimates the accord may boost Ukraine’s gross domestic product by 0.1% in the medium- to long-term, the Economy Ministry said in a statement on its website. 

“Ukraine is a bridge for our exports to Europe, and an important source for our imports related to food security,” Al-Zeyoudi said in the statement. The agreement “will provide Ukrainian companies and entrepreneurs with a new platform that allows them to expand towards growth markets in Asia and Africa through the UAE.”

Al-Zeyoudi said the pact would “play an active role in revitalizing the Ukrainian economy, and would provide new opportunities for the business communities of the two friendly countries.”

“It is not a classic free trade agreement, it is comprehensive, and it includes goods, services, investments, digital trade, and so on,” Ukrainian Economic Minister Yulia Svyrydenko said. The ministry said it expects exports of metals and vegetable oil to rise as a result of the deal.

Joint investment between the two countries reached $360 million in 2022 across several sectors including logistics and infrastructure, travel and tourism, and technology, according to the statement.

The energy-rich UAE has been signing similar pacts with several countries it is targeting for trade growth such as India, Israel and Turkey. In 2021, the Gulf country said it planned to deepen its trade ties in fast-growing economies by drawing $150 billion in foreign investments.

The UAE has maintained ties with both Ukraine and Russia since the start of the Kremlin’s invasion. The Gulf nation’s business capital Dubai has been a destination for both Russians and Ukrainians.