The UAE and Ukraine have finalised the terms for a Comprehensive Economic Partnership Agreement, which is hoped to boost the economy of the Eastern European nation disrupted by its two-year war with Russia.
The agreement will provide a host of mutual benefits for the two countries, including the reduction of tariffs on essential products and the removal of trade barriers to promote fair market access, state news agency Wam reported on Monday.
The deal is also hoped to support Ukraine's recovery through the rebuilding of vital economic sectors and infrastructure, in addition to boosting its supply chain to the Middle East and North Africa for its major exports, including grains, machinery and metal.
The deal is the UAE's 15th Cepa that has been implemented, formally signed, or has successfully been negotiated with nations spanning Africa, Asia, Europe and South America.
Eleven have so far been signed, with India, Turkey, Israel, Indonesia, Cambodia, Georgia, Mauritius, Kenya, the Republic of Congo, Colombia and Costa Rica.
The UAE is currently holding talks to conclude new deals with Serbia, Vietnam, the Philippines, New Zealand and Ecuador, while negotiations with South Korea are complete.
The implementation of its latest Cepa will help Ukraine's business community access a "new platform" from which they can tap into the high-potential markets of Asia and Africa through the UAE, said Dr Thani Al Zeyoudi, Minister of State for Foreign Trade.
It will also unlock "new investment pathways that can reconstitute sectors such as logistics, manufacturing and IT and rebuild essential infrastructure”, he added.
“The agreement will play an active role in the revitalisation of the Ukrainian economy, and we look forward towards the ratification of the deal and the new opportunities it will create for the business communities on both sides.”
The UAE's Cepa programme is expected to bolster the UAE’s exports by 33 per cent and contribute more than Dh153 billion ($41.7 billion) to national GDP by 2031.
Its benefitsinclude enhanced market access, lower or eliminated tariff rules, simpler customs procedures, transparency and rule-based competition.
Ukraine's economy, which was hit hard after Russia's invasion in February 2022, has started to gradually recover.
The war had dragged Ukraine's economy to a 29.1 per cent contraction that year, data from the International Monetary Fund shows.
However, its GDP rebounded and posted 5 per cent growth in 2023, with expectations of expansion between and 4 per cent expansion in 2024, the Washington-based fund said.
Ukraine's economy "was more resilient than expected in 2023, with robust growth outturns, continued sharp disinflation and the maintenance of adequate reserves", the fund said last month.
However, headwinds are re-emerging in 2024, with growth expected to soften due to uncertainty about the continuing war and as supply constraints become more binding.
"The outlook remains subject to exceptionally high downside risks arising from war-related factors, potential shortfalls in external financing and the socio-economic impact of policies that may be required if shocks materialise," it said.
Non-oil trade between the UAE and Ukraine was estimated at $385.8 million in 2023, while joint foreign direct investment was at about $360 million by the end of 2022 across sectors such as logistics and infrastructure, travel and tourism, and advanced technology, official data shows.
"I am confident that the Ukrainian and Emirati business communities will fully capitalise on the opportunities presented by the Ukraine-UAE Cepa, thereby unlocking the immense potential in our trade and economic co-operation," said Yulia Svyrydenko, Ukraine’s First Deputy Prime Minister and Minister of Economic Development and Trade.
