South Korea and UAE Sign Trade Pact to Strengthen Economic Ties

South Korea and the UAE inked a trade pact on Wednesday during a summit between their leaders, signalling a commitment to enhance business and investment relations.

The summit, which featured the traditional welcome of UAE President Sheikh Mohammed bin Zayed Al-Nahyan by host South Korea, emphasised the significance of the leaders’ special bond in deepening the strategic partnership between the two countries, as stated by President Yoon Suk Yeol’s office.

Highlighting the focus areas of energy and defence, the summit aimed to capitalise on the investment potential of the energy-rich Gulf state. The UAE reaffirmed its commitment to invest $30 billion in South Korean businesses, covering sectors ranging from nuclear power and defence to hydrogen and solar energy.

Additionally, both parties signed agreements aimed at promoting investment in forward-looking sectors within South Korea’s economy. The Abu Dhabi National Oil Co. signed a letter of intent for a South Korean company to construct at least six LNG carriers valued at approximately $1.5 billion.

Furthermore, the industry ministers formally ratified a Comprehensive Economic Partnership Agreement that will eliminate tariffs on South Korean arms exports once ratified. Over the next decade, the UAE will gradually eliminate import duties on automobiles, while South Korea will reciprocate by removing tariffs on crude oil imports. Ultimately, this deal will abolish tariffs on more than 90% of imports for both countries.

During the summit, Sheikh Mohammed engaged with leaders of prominent South Korean conglomerates, although no new arms deals were announced. Both sides expressed a commitment to enhancing long-term cooperation in their defence industries.

South Korea’s pursuit of global defence contracts aligns with its ambition to become the world’s fourth-largest defence exporter by 2027, with recent agreements including partnerships with Poland to strengthen defence capabilities in light of regional tensions.

Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.

Contact us