The UAE and Chile signed a Comprehensive Economic Partnership Agreement (Cepa) on Monday in Abu Dhabi, paving the way for deeper economic collaboration between the two countries.
The signing coincided with an official visit to the UAE of Gabriel Boric, President of Chile, during which he was received by President Sheikh Mohamed, to discuss strengthening cooperation on a range of fronts. The agreement was signed by Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, and Alberto van Klaveren, Chile’s Minister of Foreign Affairs, at a ceremony in the UAE capital.
The deal, which is the latest in the UAE’s foreign trade programme, will create a range of new opportunities by eliminating or reducing customs duties covering 99.5 per cent of the value of the UAE’s imports from Chile, opening market access to services exports, removing unnecessary barriers to trade, and facilitating investment and joint-ventures. As a result of these measures, the UAE-Chile Cepa is projected to increase non-oil bilateral to $750 million by 2030, more than doubling the US$306 million shared in 2023. The deal is also set to boost the value of UAE exports by $247 million by 2030, according to official UAE estimates.
Al Zeyoudi heralded the deal as another important milestone for the UAE. “The UAE-Chile Cepa is a significant step forward for our foreign trade ambitions and consolidates our growing relationship with South America. Chile offers a range of exciting opportunities for our private sector, particularly in key sectors such as manufacturing, mining, financial services, renewable energy, tourism and agriculture. Importantly, this Cepa also secures a partner that shares our belief in the importance of sustainable growth, from trade technology to eco-tourism, and who we can work with to shape the economy of tomorrow.”
Van Klaveren said: “This is Chile’s first trade agreement with a country in the Middle East and the Gulf in particular. We are confident that the broad liberalization of access to both markets established in the Cepa will substantially impact bilateral trade. Furthermore, this agreement facilitates the negotiation of a future Investment Agreement, important for both parties. As a whole, the Cepa raises our relations with the United Arab Emirates to a new level and will allow us to project ourselves more solidly throughout the region.”
Chile is the fourth-largest economy in South America with a GDP in excess of $300 billion. It is also the world’s largest copper producer, the second largest lithium producer and boasts rich agriculture, fishery and forestry resources. The UAE is already an active investor in the country, with key investments in fruit production and export, real estate, and transport.
The UAE-Chile Cepa is the second deal the UAE has signed with a South American nation this year, following the signing of a Cepa with Colombia in April. The Cepa programme was launched in September 2021 as a critical pillar of the UAE’s growth and diversification efforts. Foreign trade remains the cornerstone of the UAE’s economic agenda. In 2023, the UAE’s non-oil trade in goods reached an all-time high of $701 billion, a 12.6 per cent increase on 2022 – and 34.7 per cent more than 2021.