A new comprehensive economic partnership agreement (CEPA) will boost trade and investment between the UAE and Jordan, targeting key sectors such as tourism, real estate, and renewable energy

Bilateral trade between the UAE and Jordan is expected to surge to $8 billion by 2032, following the signing of a Comprehensive Economic Partnership Agreement (CEPA). This development marks a significant milestone in the relationship between the two countries, with trade already standing at $4.2 billion in 2023. UAE Minister of State for Foreign Trade, Thani bin Ahmed Al-Zeyoudi, highlighted the potential this agreement brings for businesses, entrepreneurs, and startups in both nations.

The CEPA, signed on 6th October, follows extensive negotiations and coordination between the two countries. Speaking about the agreement, Al-Zeyoudi said it will create new growth opportunities across various sectors, while also reflecting the deep-rooted relationship between the two countries. He added that the agreement is set to come into effect later this year after ratification.

This strategic deal aligns with the UAE’s ongoing efforts to diversify its economy by strengthening non-oil trade relations. The Emirates has been actively pursuing trade deals globally, having recently concluded talks to sign CEPAs with New Zealand and Australia. Plans are also underway for similar agreements with Japan, all part of a broader push to expand trade and investment opportunities.

Historic Growth and Mutual Investments The UAE has long been a major investor in Jordan, with mutual investments currently estimated at around $22.5 billion. The UAE accounts for $4 billion of foreign direct investment in Jordan, making it the largest international investor in the country. This figure represents 14 per cent of the Emirates’ total foreign investment, underscoring the significance of the UAE-Jordan economic partnership.

Al-Zeyoudi highlighted promising areas for further investment between the two nations, including tourism, hospitality, real estate, renewable energy, transport, and logistics. These sectors, coupled with manufacturing, pharmaceuticals, and food security, are seen as key drivers of future growth under the CEPA.

The comprehensive trade agreement also aims to enhance job creation and innovation, particularly for young entrepreneurs and startups. This focus on economic opportunities for new businesses is expected to stimulate long-term, sustainable development in both countries.

Boosting Non-Oil Trade Non-oil trade between the UAE and Jordan has been steadily increasing. In 2023, trade exceeded $4.2 billion, marking a 37.9 per cent jump from 2021 and a 47.7 per cent rise compared to 2019. The signing of the CEPA aims to build on this momentum, doubling trade within the next decade and fostering a more robust economic relationship.

The agreement also follows a significant $2.3 billion deal signed last month for a 360-kilometre railway project that will connect Jordan’s Aqaba port with its mining hubs at Al-Shidiya and Ghor Al-Safi. This project, which will be developed and operated by the UAE’s Etihad Rail, is part of a larger $5.5 billion investment package agreed upon by the two countries in November 2023.

The CEPA and the railway project are clear indicators of the UAE’s commitment to supporting Jordan’s infrastructure development and enhancing its regional connectivity. By improving transport and logistics capabilities, Jordan is expected to see significant economic benefits, particularly in trade, mining, and tourism.

Regional Trade Strategy The UAE’s push to secure trade agreements like CEPA is part of a broader regional trade strategy designed to bolster its economy through enhanced international cooperation. In recent years, the UAE has signed similar agreements with India, Turkiye, Indonesia, and Cambodia. These deals have contributed to the Emirates’ economic resilience, with the UAE’s central bank projecting a 4 per cent economic growth this year.

For Jordan, the partnership offers an opportunity to further integrate into global trade networks while capitalising on its strategic location and growing sectors. The railway project, in particular, is expected to unlock new trade routes and facilitate the flow of goods between the Gulf and the wider region.

The CEPA signing is seen as a mutually beneficial arrangement that will solidify the long-standing economic and political ties between the two countries, fostering greater collaboration in the years to come. With a focus on sustainability, innovation, and economic diversification, both nations stand to gain significantly from this landmark agreement.

As the UAE and Jordan continue to deepen their trade and investment relations, the CEPA is set to play a pivotal role in shaping the future of both economies. From creating new opportunities for entrepreneurs to enhancing infrastructure and promoting sustainable growth, the agreement is a key step in achieving long-term economic success for both nations.