The UAE and South Korea signed a significant trade agreement during a summit on Wednesday, aiming to drastically reduce import duties and strengthen business and investment relationships.
President Yoon Suk Yeol’s office emphasized that the “special bond between the two leaders” serves as a catalyst to advance the strategic partnership between the two nations.
The summit, attended by UAE President Sheikh Mohammed bin Zayed Al Nahyan, followed Yoon’s state visit to Abu Dhabi last year and focused on energy and defense, as South Korea seeks to leverage the investment potential of the energy-rich Gulf state.
The UAE reaffirmed its commitment to last year’s pledge of $30 billion in investments for South Korean businesses, covering sectors such as nuclear power, defense, hydrogen, and solar energy.
A notable development from the summit was the Abu Dhabi National Oil Company’s signing of a letter of intent with Hanwha Ocean and Samsung Heavy Industries to construct at least six LNG carriers, valued at approximately $1.5 billion.
Industry ministers from both countries formally signed a Comprehensive Economic Partnership Agreement (CEPA) that was initially agreed upon in October.
This agreement will eliminate all tariffs on South Korean arms exports once ratified, aligning with South Korea’s strategy to become the world’s fourth-largest defence exporter by 2027.
Additionally, the UAE will gradually abolish import duties on automobiles over the next decade, while South Korea will remove tariffs on crude oil imports. Ultimately, the deal aims to eliminate tariffs on more than 90% of both nations’ imports.
“South Korea’s crude oil imports from the UAE are expected to increase,” stated Seoul’s Minister of Trade Cheong In-kyo during a press conference, highlighting the country’s dependence on energy imports.
UAE’s Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi mentioned that the UAE is also expected to sign CEPAs with Malaysia, Vietnam, and the Philippines in the coming months.
During the summit, Sheikh Mohammed met with leaders of South Korea’s major conglomerates, including Jay Y. Lee of Samsung Electronics, SK Group Chairman Chey Tae-won, and Kim Dong-kwan of Hanwha Group, a prominent defence contractor.
While no new arms deals were announced, Yoon’s office indicated a mutual interest in enhancing defence industry cooperation.