UAE, Indonesia Sign Free Trade Agreement
September 7, 2022
The United Arab Emirates and Indonesia have signed a free trade agreement that aims to increase bilateral trade between the two countries to $10 billion by the end of 2030. Sheikh Mohammed bin Zayed Al Nahyan, the President of the United Arab Emirates, and Joko Widodo, the President of Indonesia, witnessed the signing at Abu Dhabi, under the UAE-Indonesia Comprehensive Economic Partnership Agreement. Indonesia is the largest economy in Southeast Asia, with a population of more than 273 million.
The volume of bilateral trade between the two countries currently stands at $4 billion. The balance is slightly tilted in favour of the United Arab Emirates, with exports from the United Arab Emirates to Indonesia totalling $2.1 billion and imports from Indonesia valued at $1.9 billion. Following Comprehensive Economic Partnership Agreements with Israel and India earlier in 2022, this free trade agreement marks the third of its kind signed by the United Arab Emirates in the same year.
Of Emirati exports to Indonesia, petroleum and related products account for $1 billion. The rest is made up by exports of iron and steel – about $200 million – as well as $100 million worth of aluminium. Precious metals, precious stones, pharmaceuticals, sulphur, and cement contribute to the remaining; while Indonesia’s largest export to the United Arab Emirates is palm oil worth $290 million. Indonesia also exports$170 million in vehicles and accessories, plus $150 million worth of electrical equipment.
Dr. Thani Al Zeyoudi, the UAE Minister of State for Foreign Trade, remarked that the economic partnership would create 55,000 highly skilled jobs in the United Arab Emirates by 2030.Under the new economic agreement, there will be duty-free access to Indonesian palm oil, other food products, fashion wear, as well as other commodities. The two countries will also increase investments and cooperation in sectors like logistics, energy, infrastructure, agriculture, healthcare, and tourism.
The United Arab Emirates reaffirmed that it was committed to investing $10 billion in Indonesia’s new capital city project. Relocating the capital from Jakarta to East Kalimantan on the island of Borneo by 2024 is an ambitious project estimated to cost $35billion.
New Horizons Business Consultants is a provider of corporate consulting solutions in Dubai, United Arab Emirates. We are led by Ms. Francesca Bouwman, who has years of experience in International Business Advisory and fluently speaks several European languages. If you would like to know more about how we can help your business explore new markets, please call us at +971 58 500 8643 or email us at email@example.com and we will get back to you at the earliest.