CEPA is the first free trade agreement signed by Vietnam with an Arab country, opening a new era in the increasingly substantive relationship between Vietnam and the UAE in particular as well as Arab countries in general.
In October 2024, in Dubai, Prime Minister of the Socialist Republic of Vietnam Pham Minh Chinh and Vice President and Prime Minister of the United Arab Emirates (UAE) Mohammed bin Rashid Al Maktoum witnessed the handover ceremony of the Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA Agreement) signed by Minister of Industry and Trade of Vietnam Nguyen Hong Dien and State Secretary of the UAE Ministry of Economy Thani bin Ahmed Al Zeyoudi.
CEPA is the first free trade agreement that Vietnam signed with an Arab country, opening a new era in upgraded and increasingly substantive relations between Vietnam and the UAE in particular as well as Arab countries in general. The CEPA Agreement was signed in the context of the strong development of bilateral trade relations between Vietnam and the UAE.
The signing of the Agreement after a record period of one year of negotiations with 5 official negotiation sessions, including 3 direct sessions at the ministerial level, is a clear testament to the commitment to bring trade and investment cooperation between the two sides to a new level.
The Agreement consists of 18 Chapters, 15 Appendices and 2 bilateral letters with contents including trade in goods, services-investment, rules of origin, technical barriers to trade (TBT), animal and plant quarantine (SPS) measures, customs, trade remedies, procurement of the Government, etc intellectual property, legal-institutional.
Notably, the two sides have agreed to make a strong commitment to trade liberalization with the UAE committing to eliminate roadmap tariffs for 99% of Vietnam's exports to the UAE, while Vietnam has also committed to eliminating roadmap tariffs for 98.5% of UAE's exports to Vietnam. The agreement also includes many regulations to facilitate trade and investment, in line with current trends in digital transformation and green development.
Currently, the UAE is one of Vietnam's leading important trade-investment partners in the Middle East, an important gateway for Vietnam to access markets in this region as well as other markets in West Asia and Africa.
In addition, the economic and trade structures of the two countries are complementary. Therefore, CEPA is a favorable premise for Vietnam to promote the export of strong products to the UAE and then countries in the Middle East, West Asia and Africa; at the same time, they have the opportunity to access advanced technology, capital and quality services of the UAE, contributing to reducing production costs and improving the competitiveness of Vietnamese goods. In contrast, UAE goods and services will have the opportunity to access the Vietnamese market as well as ASEAN countries through Vietnam's strategic location in the region.
Currently, the UAE is the largest export market and the second largest trading partner (after Kuwait) of Vietnam in West Asia. Statistics of the General Department of Customs show that in the period 2018-2023, the total trade exchange between the two countries will average about 5 billion USD/year. In terms of trade balance, Vietnam always has a trade surplus to the UAE market with a large value (from 3-4 billion USD/year).
In 2023, the total two-way trade exchange will reach nearly 4.7 billion USD, up 5.9% compared to 2022, of which Vietnam's exports will reach more than 4 billion USD, up 4.3% and imports will reach over 676 million USD, up 16%. In the first 8 months of 2024, the total two-way trade exchange reached over 4.47 billion USD, up 45% over the same period in 2023, of which Vietnam's exports reached 3.85 billion USD, up 47.5% and imports reached 623.5 million USD, up 32.5%.
In terms of commodity structure, Vietnam's main exports to the UAE include mobile phones, computers and components, electrical products, household electronics, pepper, seafood, footwear, textiles, grain products, plastic products, furniture, etc. Vietnam's main imports from the UAE include raw plastics, liquefied petroleum gas (LPG), petroleum preparations, animal feed materials, ordinary metals, chemicals, etc.
