The president of the United Arab Emirates (UAE), Mohamed bin Zayed Al Nahyan, signed a “Comprehensive Economic Partnership Agreement (CEPA)” alongside South Korean counterpart Yoon Suk-yeol in Seoul on Wednesday, dramatically expanding trade between the two countries.
The CEPA is South Korea’s first free trade deal with a Middle Eastern country, the South Korean news service Yonhap observed. The two countries hashed out most of the details of the agreement in October but finalized and signed the deal on Wednesday as Bin Zayed embarked on a tour of Asia that will also later include a stop in China. Bin Zayed’s visit is the first ever by a UAE president to South Korea.
“Under the agreement, the two countries will lift tariffs on more than 90 percent of goods traded over the next 10 years,” Yonhap reported. “The UAE will especially lift tariffs on South Korea’s major export goods, including cars, auto parts, defense items, fruits and instant noodles. … The UAE also agreed to open its market to online gaming content and medical services.”
The CEPA is part of a longer list of agreements the two countries signed on Wednesday that included, among other measures, “19 business deals and memorandums of understanding (MOUs) encompassing investment, energy, nuclear power, defense, technology, climate change and cultural exchanges,” Yonhap reported. The UAE committed in the deal to invest $30 billion in South Korea.
Much of the agreement centered on energy. South Korea signed a major agreement with the UAE state oil corporation, the Abu Dhabi National Oil Company (ADNOC), to build at least six liquified natural gas (LNG) carriers intended to facilitate shipping to South Korea. The CEPA itself will also end a tariff on crude oil imports to South Korea in the next decade, increasing the potential for UAE to profit from selling oil to Seoul. South Korea is neither an oil nor a gas power and has met its growing demand through similar agreements with other Mideast states.
Bin Zayed’s visit also resulted in another unique energy agreement: a deal between the Korean government’s Korea Electric Power Corp. and the Emirates Nuclear Energy Corporation to build nuclear reactors in an unspecified third country together. The Emirati newspaper the National noted that South Korea was pivotal to the UAE developing a nuclear energy industry, as it aided in the construction of the UAE’s Barakah Nuclear Power Plant.
President Yoon held a summit with the visiting bin Zayed on Wednesday after Seoul welcomed bin Zayed with high honors, including an elaborate military display.
“On Wednesday, the second day of his two-day visit, an official reception was held for Sheikh Mohamed at the Office of the President in Seoul,” the National detailed. “It featured several displays by Korean aircraft, a 21-gun salute and an honour guard formation as the national anthems of both countries played.”
“Groups of children performed an Emirati song while others waved the flags of both nations, and Seoul’s streets were adorned with UAE flags as the city’s landmarks were illuminated in its colours,” it observed. The UAE president also “enjoyed a traditional Korean tea ceremony” with their hosts.
Posting on social media, bin Zayed thanked Yoon for the “constructive discussions” held and applauded the “promising step forward” in their relationship after signing the CEPA.
“Today’s signing represents a promising step forward as we commit to building upon the robust economic cooperation that links our nations and delivering tangible growth for our peoples,” bin Zayed wrote.
I was pleased to meet @President_KR Yoon Suk Yeol in Seoul and engage in constructive discussions on strengthening bilateral ties. Together, we witnessed the signing of numerous MoUs and the Comprehensive Economic Partnership Agreement between the UAE and Republic of Korea.… pic.twitter.com/LY1j1dKryZ
— محمد بن زايد (@MohamedBinZayed) May 29, 2024
The free trade deal is a major step forward for the Yoon administration, which has prioritized expanding trade ties with Gulf states. In addition to the UAE, Yoon has spearheaded efforts to increase defense, energy, and trade cooperation with neighboring Saudi Arabia, which he visited in October, the first-ever such visit by a South Korean president.
“Korea is Saudi Arabia’s optimal partner in the post-oil era,” Yoon said during a meeting with Saudi Crown Prince Mohammed bin Salman at the time. “It is encouraging to see the bilateral relationship develop from the traditional sectors of energy and construction to a cutting-edge industrial partnership that jointly produces automobiles and ships, as well as cooperation in the areas of tourism and cultural exchanges.”
South Korean companies have since taken on a leading role in signing agreements to help bin Salman build “Neom,” a proposed future city in northwest Saudi Arabia expected to boast state-of-the-art event and festival venues, tech hubs, and – most alarmingly – a 106-mile desert skyscraper known as “The Line” that the Saudi government claims will house 1.5 million people. Neom played a significant role in the $75 billion worth of deals with Korean companies that bin Salman clinched during a visit to Seoul in 2022.
During his Middle East tour in October, Yoon also made a stop in Doha, Qatar, during that tour, where he told local media he was seeking expansion in “cooperation in various areas including energy, infrastructure, trade, investment, [and] the defense industry.”