The European Union and the United Arab Emirates have formally launched negotiations for a comprehensive bilateral free trade agreement, a move that could mark the EU's first such deal in the dynamic Gulf region. This significant step, initially agreed upon by European Commission President Ursula von der Leyen and UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan on April 10, was reconfirmed today in Dubai by Commissioner for Trade and Economic Security Maroš Šefcovic and UAE Minister Thani bin Ahmed Al Zeyoudi. Both officials expressed a strong ambition to achieve a commercially beneficial agreement, with substantive work by negotiating teams expected to commence as early as June.

President von der Leyen emphasized the importance of this milestone, stating, "The launch of EU-UAE trade talks is an important milestone. We will now work together to seal a deal that can benefit our peoples and businesses, bringing us closer together in a spirit of cooperation." She highlighted the potential for the agreement to strengthen ties between the EU and the Gulf region, offering new opportunities for EU businesses while bolstering partnerships in crucial areas like renewable energy and digital technologies.3

The initial phase of negotiations will primarily focus on reducing tariffs on goods, streamlining services, and facilitating digital trade and investment flows. Furthermore, discussions will delve into strategies to boost trade in strategic sectors vital for both economies' transitions towards a green and digital future, including renewable energy, green hydrogen, and critical raw materials. This aspect of the negotiations is particularly relevant given the common objective of both the EU and the UAE to transform their economies for sustainable growth and enhance economic security.

The potential for increased collaboration is immense. The EU and UAE foresee robust opportunities in cutting-edge sectors such as artificial intelligence (AI), Fintech, space technologies, advanced machinery, healthcare, logistics, infrastructural development, and sustainable food systems. A successful agreement with the UAE would significantly expand the EU's already extensive network of 44 trade deals with 76 countries, solidifying its position as the world's largest network of trade agreements.

The existing trade relationship between the EU and the UAE is already substantial. Annual trade in goods stands at EUR 55 billion, making the UAE the EU's 19th largest trading partner. Trade in services amounts to approximately EUR 39 billion, positioning the UAE as the EU's 11th largest partner in this sector.