Korea, UAE sign free trade pact at Yoon-Mohamed summit
President Yoon Suk Yeol and United Arab Emirates (UAE) President Mohamed bin Zayed Al Nahyan are greeted by children during an official welcoming ceremony for the sheik at the presidential office in Yongsan District, Seoul, Wednesday. Yonhap
Korea and the United Arab Emirates (UAE) signed a bilateral comprehensive economic partnership agreement (CEPA), Wednesday, as President Yoon Suk Yeol and his UAE counterpart Mohamed bin Zayed Al Nahyan held a summit in Seoul to explore measures to expand bilateral trade and economic partnerships.
Additionally, during the summit, the Abu Dhabi National Oil Company (ADNOC) signed letters of intent to commission two Korean shipbuilders to construct six large liquefied natural gas (LNG) carriers.
The summit took place on the last day of Mohamed's two-day state visit to Korea, the first by a UAE president. Yoon made a state visit to the UAE in January last year. Mohamed previously visited Seoul five times, but this was the first visit after he took office in May last year.
Members of the Akh unit, Korean troops of a military contingent in the United Arab Emirates (UAE), salute to a vehicle carrying UAE President Mohamed bin Zayed Al Nahyan near the Korean presidential office in Yongsan District, Seoul, Wednesday. Joint Press Corps
"During the summit, President Yoon evaluated that the reciprocal state visits by the leaders within a 16-month period show that the two countries' relations are now at their peak," Korea's First Deputy Director of National Security Kim Tae-hyo said during a press briefing.
"President Mohamed responded that he is proud of the relationship between Korea and the UAE, emphasizing that it is irreplaceable. He also expressed his desire to elevate the bilateral relationship to an even higher level."
According to Seoul's presidential office, the discussions between the leaders centered on strategies to enhance the special strategic partnership between the two countries, with particular emphasis on economic and energy sectors.
In line with these efforts, the two sides formally ratified the Korea-UAE Comprehensive Economic Partnership Agreement (CEPA), facilitating tariff-free trade in automobiles, car parts, electrical products, crude oil, and petrochemicals.
Negotiations for the free trade pact were concluded in October last year to progressively eliminate tariffs on 92.8 percent of Korea's traded items and 91.2 percent of the UAE's traded items over a decade. This marks Korea's inaugural Comprehensive Economic Partnership Agreement (CEPA) with an Arab nation.
According to the government, Korea's main exports to the UAE are weapons, and most of them are subject to the immediate elimination of tariffs when the CEPA takes effect. This is expected to boost Korea's arms exports significantly, in line with the rapidly increasing defense demands in the Middle East.
Additionally, the CEPA provides a competitive edge to Korean exporters compared to their counterparts in the United States, the European Union, Japan, China, and other nations that have yet to establish a similar agreement with the UAE.
Tariffs on eco-friendly vehicles, such as electric and hybrid automobiles, will be fully eliminated within a maximum of 10 years, while duties on dump trucks or cargo trucks will be lifted immediately. The government anticipates that this development will propel the export growth of Korean carmakers, in line with the increasing construction demands in the Middle Eastern market.
The agreement will also grant Korea maximum access to the UAE's online gaming, healthcare, video, and music content markets. Notably, this marks the first instance of the UAE opening its online gaming market in a free trade agreement with a foreign nation.
Following the signing of the CEPA, the Korean government will soon ask the National Assembly to ratify the pact, which will be implemented when each nation completes the necessary legal processes.
The Korean Air Force's Black Eagles acrobatic team flies over the presidential office in Yongsan District, Seoul, Wednesday, during the official welcome ceremony of United Arab Emirates President Mohamed bin Zayed Al Nahyan. Yonhap
During the summit, the leaders also reaffirmed a series of accomplishments from Yoon's state visit to the UAE last year, notably the commitment from Middle Eastern countries that their sovereign wealth funds will invest $30 billion in strategic sectors within Korea.
To actualize this commitment, Korea's Deputy Prime Minister Choi Sang-mok and Mubadala Investment Company CEO Khaldoon Khalifa Al Mubarak signed a memorandum of understanding (MOU) to establish an investment platform that can involve multiple institutions from both countries.
Including Mubadala, a number of UAE-based institutions are reviewing investment opportunities on projects worth over $6 billion, the Korean presidential office said.
The two countries will also expand their cooperation in the field of energy. Samsung Heavy Industries and Hanwha Ocean each signed a letter of intent to build a total of six LNG carriers with the ADNOC.
The combined value of the vessels is presumed to reach $1.5 billion, and the Korean government expects that the actual deals will come late next month, and further details on the vessels' prices and options will be fixed at the time of the actual deals.
Also, the two countries signed an MOU to expand their joint oil stockpiling project, which currently stands at 4 million barrels, to enhance their energy security cooperation. Additionally, they inked an MOU on carbon capture and storage cooperation to produce clean hydrogen using LNG to establish a support basis for hydrogen cooperation projects.