Australia has reached a free trade agreement (FTA) with its largest trade and investment partner in the Middle East, United Arab Emirates. Under the agreement, Australian exports are expected to increase by $678 million per year
The federal government estimates it will deliver savings of around $50 million per year on food and agriculture exports.
In 2023, two-way trade between the countries was worth $9.9 billion and two-way investment was $20.6 billion. The government said it expects that to significantly increase.
The new trade agreement means nearly all Australian products entering the UAE will be tariff free. The first year will deliver around $135 million in savings, rising to $160 million per year once the agreement is fully implemented.
Federal trade minister, Don Farrell, said the deal was “more than just numbers”.
“More trade means more higher paying jobs, more opportunities for our businesses, greater investment to build things here in Australia, and cheaper bills for Australian households,” Farrell said.
The government said the Middle East market has around 58 million consumers and a combined GDP of $1.4 trillion.
Key Australian exports to the UAE include alumina, meat, dairy, oil seeds, seafood, steel, canola seeds, nuts, honey, coal, chickpeas, lentils, and higher education.
Australian import tariffs on UAE produced furniture, copper wire, glass containers, and plastic will be cut, saving Australian businesses and consumers around $40 million a year. Tariff cuts on alumina will benefit the mining sector, with tariffs valued at $1 billion last year.
“The UAE has some of the largest sovereign wealth funds in the world. A trade agreement with the UAE will facilitate investment, which is important to achieving the Albanese Government's ambition of becoming a renewable energy superpower,” Farrell said.
The package includes a framework to encourage two-way investment, including sectors that underpin energy transition, such as critical minerals.
For service providers in the education, financial, health, and R&D, 100 per cent foreign ownership in the UAE market is guaranteed. It also opens the door for certain skilled professionals to work temporarily in the UAE.
The agreement includes commitments on promoting labour rights, on protecting the environment, and on sustainable development. Australia's right to regulate for all levels of government has been preserved.
The trade agreement with the UAE is Australia's first trade agreement with a dedicated chapter covering First Nations trade. First Nations businesses seeking to export their goods to the UAE will benefit from preferential market access and rules under the agreement.
National employer group AiGroup chief executive, Innes Willox, said the deal reduces regulation on the export sector, which employs one in for Australians.
"This is the first trade agreement Australia has made in the Middle East and will give many companies the confidence to explore the region for the first time. Deeper connections with new and important partners is good for the future of our economy.
"It is particularly positive that this deal has been made during a period of heightened global tensions and economic uncertainty, which signals that these types of deals can still be made,” Willox said.
“Modern and comprehensive rules covering investment, IP and digital trade will ensure that the relationship grows beyond the existing goods and education exports. This will provide Australian companies – particularly in industrial and energy-related sectors – with a secure entry point in the region.
“Australian companies are looking to diversify their commercial relationships to position themselves for a sustainable trading future,” Willox said.
