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UAE becomes 1st Arab country to sign free trade pact with S. Korea

UAE reaffirms its commitment of investing $30b to S. Korea during Seoul summit

May 29, 2024 - 15:51 By Ji Da-gyum
South Korean President Yoon Suk Yeol (right) and United Arab Emirates President Mohamed bin Zayed Al Nahyan attend a welcoming ceremony at the presidential office in Seoul on Wednesday. Mohamed came to Seoul the previous day for a two-day state visit. (Yonhap)

South Korea and the United Arab Emirates on Wednesday officially signed a comprehensive economic partnership agreement aimed at enhancing trade openness, expanding market access and fostering investment during the first state visit of the UAE president to South Korea.

The UAE is the first Arab country to sign such an agreement with South Korea.

Trade, Industry, and Energy Minister Ahn Duk-Geun and UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi, attend the signing ceremony held on the occasion of the summit between South Korean President Yoon Suk Yeol and UAE President Mohamed bin Zayed Al Nahyan at the presidential office in Yongsan, Seoul.

The key elements of CEPA, akin to a free trade agreement, include "tariff liberalization, the opening of service sectors such as health care and online gaming, and the establishment of a future-oriented economic partnership in fields like biotechnology and energy," according to the presidential office.

Yoon's office also explained that the signing of the CEPA has established an "institutional framework to strengthen economic partnership across various sectors, including trade liberalization and investment expansion."

Under the CEPA, both countries have committed to eliminating tariffs on over 90 percent of traded goods within the next decade.

Park Chun-sup, senior presidential secretary for economic affairs, emphasized that once the CEPA is ratified by each parliamentary body, the removal of tariffs on South Korean weapons will result in a surge in weapons exports to the Middle East.

The signing ceremony took place around seven months after both parties confirmed the conclusion of negotiations on CEPA in October 2023.

During the summit, Yoon and Mohamed also "confirmed the outcomes of the UAE's commitment of a $30 billion investment through sovereign wealth funds," and thereby strengthening public confidence in investment cooperation and increasing interest in investing in Korean companies, according to Yoon's office.

In January 2023, during his trip to the UAE, Yoon secured a $30 billion investment commitment during his summit with Mohamed, marking the first state visit by a South Korean President to the UAE.

Yoon's office explained that "UAE institutions, including Mubadala, are currently reviewing investment opportunities worth over $6 billion in the Korean market through investment cooperation channels."

South Korean President Yoon Suk Yeol (center), his wife, Kim Keon Hee (right), and United Arab Emirates President Mohamed bin Zayed watch the flight of the Air Force's Black Eagles aerobatic team during a ceremony welcoming the UAE leader at the presidential office in Seoul on Wednesday. (Yonhap)

The presidential office also highlighted that the summit has established an "all-encompassing cooperation system covering nuclear power and energy, defense, AI and other advanced technologies, as well as investment."

The summit concluded with the signing of 19 agreements and memorandums of understanding. The MOUs encompass various areas including climate change response, maritime transport cooperation, joint investment in petrochemicals, cooperation on radio frequency management, expansion of joint oil reserve operations and enhancement of intellectual property capacities.

"President Mohamed's visit has paved the way for the deepening and advancement of the 'Special Strategic Partnership' between the two countries, rooted in the special bond between their leaders," Yoon's office said.

The UAE stands as the sole Middle Eastern country to establish a Special Strategic Partnership with South Korea, joining a very select group of countries, including Indonesia, India and Uzbekistan.

South Korea and the UAE have agreed to jointly explore entry into the African market, energy infrastructure sector and nuclear power plant market. To solidify this collaboration, the two countries have signed three MOUs aimed at establishing a cooperation system within the sectors.

Foreign Minister Cho Tae-yul and UAE Ambassador to South Korea Abdulla Saif Al Nuaimi notably signed the MOU to "establish a cooperative system between the foreign ministries of both countries in order to seek joint entry into the African market by companies and institutions from both countries," according to Yoon's office.

During the summit, Yoon and Mohamed "discussed specific measures aimed at enhancing cooperation to promote innovative growth in both countries within the field of AI, as well as sharing South Korea's AI development strategy."

The two leaders also "concurred on the necessity to bolster long-term, strategic defense and defense industrial cooperation." This encompasses "enhancing defense collaboration centered around the Akh Unit and swiftly achieving outcomes in ongoing defense cooperation discussions between the two countries."

The UAE is uniquely the only foreign country where South Korea has deployed the "Akh Unit" for military cooperation since 2011. "Akh" means "brother" in Arabic.

United Arab Emirates President Mohamed bin Zayed Al Nahyan arrives at the presidential office in Seoul on Wednesday, greeted by salutes from personnel returning from or bound for the 'Akh Unit' deployment in the UAE. (Yonhap)

Before the summit, Yoon hosted an official welcoming ceremony for Mohamed.

Upon Mohamed's arrival at the presidential office in Yongsan, the South Korean Air Force's aerobatic team, the Black Eagles, performed a flyover, releasing smoke in the colors of the UAE flag: red, green, black and white.

Approximately 400 soldiers, who have either returned from or are scheduled to deploy with the Akh Unit, lined up at Yongsan Children's Garden -- located in front of Yoon's office -- to salute and welcome Mohamed's motorcade.

On Tuesday night, Yoon and Mohamed engaged in a cordial meeting at Changdeokgung in Seoul. They strolled through the gardens, shared tea and enjoyed a performance of a traditional royal court dance.

Mohamed made a two-day visit to South Korea, concluding Wednesday, which included meetings with leaders of major South Korean conglomerates such as Samsung Electronics Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won and Hyundai Motor Group Executive Chair Chung Euisun on Tuesday. Mohamed was visiting South Korea for the first time as the president. He visited South Korea five times as the crown prince of Abu Dhabi before becoming the state leader.