Vietnam and UAE sign comprehensive economic partnership agreement

The signing ceremony, held on October 28 in Dubai, was witnessed by Prime Minister Pham Minh Chinh and UAE Vice President and Prime Minister Mohammed bin Rashid Al Maktoum, Nguyen Hong Dien, Vietnam's Minister of industry and trade, and UAE Minister of State for Economy Thani bin Ahmed Al Zeyoudi.

The CEPA represents a major development in Vietnam's international trade strategy. While it follows the structure of traditional free trade agreements (FTAs), the CEPA incorporates higher standards and forward-looking elements that address future global trends, such as digital transformation and sustainable development.

The agreement is poised to unlock fresh opportunities for trade and investment between the two nations, whose commercial ties have grown rapidly recently. After a year of negotiations, featuring five official rounds, including three in-person ministerial-level meetings, the successful conclusion of the CEPA is being lauded as a milestone achievement.

The signing ceremony was witnessed by Prime Minister Pham Minh Chinh and UAE Vice President and Prime Minister Mohammed bin Rashid Al Maktoum. Photo: Duong Giang/VNA

The agreement covers a wide range of areas, including trade in goods and services, investment, rules of origin, technical barriers to trade, sanitary and phytosanitary measures, customs cooperation, trade defence, government procurement, intellectual property rights, and institutional frameworks.

A key feature of the agreement is the strong mutual commitment to tariff reductions. Under the terms of the CEPA, the UAE has committed to gradually eliminate tariffs on 99 per cent of Vietnam's exports. In return, Vietnam will remove tariffs on 98.5 per cent of UAE products over a phased timeline. This arrangement will provide Vietnamese businesses with increased access to the UAE market, while also creating favourable conditions for UAE exports to Vietnam.

The UAE has committed to immediately abolishing tariffs on several key Vietnamese exports such as agricultural products, seafood, consumer goods, and wood products.

In addition to trade, the CEPA features a dedicated chapter on economic cooperation, reflecting both nations' commitment to deepening collaboration across vital sectors, including tourism, transportation, financial services, manufacturing, and energy development.

Speaking at the signing ceremony, Minister of Industry and Trade Nguyen Hong Dien emphasised the strategic importance of the agreement.

“The CEPA is the first FTA Vietnam has negotiated with an Arab nation, establishing the foundation for deeper economic engagement not only with the UAE but also the broader Middle East and Africa,” said Dien. “This agreement will boost bilateral trade and open doors for significant UAE investments in Vietnam across sectors such as energy, high technology, industry, and supply chain development.”

The minister further noted that the CEPA will enhance the competitiveness of Vietnamese products in the UAE, offering Vietnamese businesses a valuable opportunity to compete with, and potentially outpace, other exporters in the region.

The UAE is currently Vietnam's largest export market in West Asia and its second-largest trading partner in the region after Kuwait. From 2018 to 2023, bilateral trade continuously reached around $5 billion annually, with Vietnam maintaining a trade surplus of between $3 billion to $4 billion per year.

In 2023, trade between the two countries reached nearly $4.7 billion, an increase of 5.9 per cent compared to the previous year. Vietnam's exports amounted to over $4 billion, up 4.3 per cent, while imports from the UAE exceeded $676 million, rising 16 per cent.

The momentum has continued into 2024, with trade during the first eight months surpassing $4.47 billion, a 45 per cent increase compared to the same period in 2023. Vietnam's exports grew by 47.5 per cent to $3.85 billion, while imports from the UAE rose 32.5 per cent cents to $623.5 million.

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