The UAE and Ukraine have officially signed a Comprehensive Economic Partnership Agreement (CEPA) aimed at enhancing trade and investment relations between the two nations. The agreement was executed on Monday by Dr. Thani Al Zeyoudi, the UAE’s Minister of State for Foreign Trade, and Yulia Svyrydenko, Ukraine’s First Deputy Prime Minister and Minister of Economy. The signing took place in the presence of President Sheikh Mohamed and Ukrainian President Volodymyr Zelenskyy.

This landmark deal is projected to contribute approximately $369 million to the UAE’s GDP and $874 million to Ukraine’s economy by the year 2031. Under the agreement, 99 percent of Ukrainian imports of UAE goods and 97 percent of Ukrainian exports to the Emirates will be exempt from customs duties, effective immediately.

The International Monetary Fund (IMF) has reported that Ukraine’s economy has faced a “devastating” impact due to the ongoing war with Russia. Despite this, Kyiv has made strides in stabilizing its economy through improved policies and external support. The country’s real GDP growth fell by 28.8 percent in 2022, coinciding with the onset of the conflict, but it rebounded to a 5.8 percent growth in 2023, according to IMF data. Projections indicate that real GDP growth may decrease to 4 percent in 2024 and further decline to between 2.5 percent and 3.5 percent for the current year, before recovering to 5.3 percent in 2026.

As of 2021, the UAE was Ukraine’s second-largest trading partner in the Gulf region, with non-oil trade between the two nations exceeding Dh1.4 billion (approximately $388 million) in 2022, as reported by the Ministry of Economy. The CEPA is expected to play a crucial role in accelerating Ukraine’s economic recovery amid the ongoing war, which will enter its fourth year on February 25.

President Zelenskyy expressed that the signing of this significant economic agreement “liberalises access to the UAE market for nearly all Ukrainian goods,” facilitating easier sales of Ukrainian products in the Emirates.

The UAE aims to achieve Dh4 trillion in foreign trade by 2031 as part of its national economic objectives. To support this goal, the country is focusing on developing non-oil sectors and strengthening relationships with trading partners to ensure sustainable growth.

Recent data from Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, reveals that the UAE’s non-oil foreign trade reached a record Dh3 trillion in 2024, marking a year-on-year increase of 14.6 percent. The CEPA agreements signed by the UAE with other nations have contributed Dh135 billion to its non-oil trade, reflecting a 42 percent rise compared to the prior year.

Since launching the CEPA program in 2021, the UAE has aimed to establish 26 agreements and has successfully signed 24, including with countries such as India, Turkey, and Israel. Negotiations are ongoing with several other nations, including the Philippines.

With the CEPA, Ukraine is expected to foster its economic recovery and unlock new opportunities for collaboration across essential sectors such as infrastructure, heavy industry, aviation, aerospace, and information technology. Additionally, the UAE’s foreign direct investment in Ukraine was reported to be around $100 million as of September 2020, covering sectors like manufacturing, transport, and agriculture, making the Emirates the largest Arab investor in Ukraine. Conversely, Ukraine’s foreign direct investment in the UAE reached $84 million at the start of 2021, primarily in real estate, retail, and manufacturing.