The UAE is to open trade talks with Ukraine, seeking to boost economic ties despite the Russian invasion.
The war in Ukraine has halved bilateral trade, but officials hoped that sealing this economic partnership would restore this lost trade, especially in food stuffs, and eventually more than double trade beyond prewar levels.
“We want to boost trade by eliminating trade barriers, customs, fees, standardisation, etc — this will bring huge potential for doubling of exports and imports,” said Thani Al Zeyoudi, the UAE’s minister of state for foreign trade. “This is a very conservative assessment — we hope to go beyond doubling. UAE foreign trade is growing fast, and we plan to bring our model to Ukraine.”
The talks come amid western pressure on the UAE, an ally of both US and Russia, for its neutral stance in the war. Abu Dhabi has abstained on some UN resolutions relating to the war and Dubai has become a haven for Russian money. The UAE said it welcomed investment from any source that is not subject to UN sanctions. Financial institutions in the country said they also comply with western sanctions on individuals and companies affiliated with the Kremlin.
The Gulf monarchy said the trade talks represented “another key component” in its efforts “to help reinvigorate the national economy of Ukraine”.
Ukraine, an important supplier of staples such as grains to the Middle East, signed more than $3bn in trade and investment pledges during President Volodymyr Zelenskyy’s visit to the UAE in February 2021. Ukraine was the second most important source for wheat for the UAE, which imports 90 per cent of its food.
Officials said the beginning of talks towards a “comprehensive economic partnership agreement” were rooted in longstanding plans to boost trade and investment globally and were unrelated to politics.
“This is part of our economic diversification process,” said Zeyoudi. “Ukraine will be a gateway to many European nations and is a step towards penetrating the European market.”
In 2021, non-oil trade between the UAE and Ukraine amounted to around $905mn, a 28 per cent increase over 2020. UAE investment in Ukraine was $243mn in 2021, with Ukrainian flows into the UAE totalling $84mn in 2020. The UAE’s trade with Russia amounted to around $4bn in 2021.
“The UAE has earned a well-deserved reputation as a prominent international trade and logistics hub,” Yulia Svyrydenko, Ukraine’s first deputy prime minister of Ukraine and economy minister, said in a statement. “At the same time, Ukraine is known for its role as a global food security guarantor and a growing IT powerhouse. That makes our economies complementary.”
The UAE’s trade negotiations with Ukraine will start in the coming weeks and follow the UAE’s conclusion of similar deals with India, Indonesia and Israel. Talks are ongoing with Turkey, Georgia and Cambodia.
The Gulf monarchy has been pursuing these pacts in an effort to diversify its economy away from oil and gas, with the aim of doubling the size of its economy to $820bn by 2030.
Source: Economy - ft.com
