South Korea and UAE sign agreement to reduce import duties at leaders’ summit

South Korea and UAE Sign Landmark Trade Pact to Slash Import Duties

Seoul: South Korea and the United Arab Emirates (UAE) signed a significant trade pact on Wednesday aimed at sharply reducing import duties, marking a new phase in the economic and strategic partnership between the two nations. This agreement was solidified during a high-profile summit attended by the leaders of both countries, who pledged to deepen business and investment ties.

The summit began with South Korea hosting UAE’s President Sheikh Mohammed bin Zayed Al Nahyan. The welcoming ceremony was a grand affair, featuring a traditional honor guard and an impressive flypast by air force jets, underscoring the importance of this bilateral relationship.

“The special bond between the two leaders serves as an opportunity to deepen and advance the two countries’ special strategic partnership,” the office of South Korean President Yoon Suk Yeol said in a statement. This meeting builds on the momentum from President Yoon’s state visit to Abu Dhabi last year, which laid the groundwork for increased cooperation in various sectors.

A central focus of the summit was on energy and defense, with South Korea aiming to leverage the investment potential of the UAE, a country rich in energy resources. During the discussions, the UAE reaffirmed its commitment to a $30 billion investment in South Korean businesses. This pledge, originally made last year, spans crucial areas such as nuclear power, defense, hydrogen, and solar energy, highlighting the UAE’s strategic interest in these high-tech and sustainable industries.

In addition to these broad investment commitments, the summit saw the signing of specific agreements designed to boost investment flows into future-focused sectors within South Korea’s economy. Among these was a letter of intent from the Abu Dhabi National Oil Company to contract a South Korean firm for the construction of at least six LNG carriers, a project valued at approximately $1.5 billion. This move signifies the UAE’s trust in South Korean industrial capabilities and its commitment to enhancing its LNG transport infrastructure.

A landmark outcome of the summit was the formal signing of the Comprehensive Economic Partnership Agreement (CEPA), which had been initially agreed upon in October. This agreement is set to eliminate all tariffs on South Korean arms exports to the UAE once ratified. In addition, the UAE will gradually remove import duties on automobiles over the next decade. Conversely, South Korea will lift tariffs on crude oil imports from the UAE. The CEPA aims to eliminate tariffs on over 90 percent of the imports between the two countries, significantly boosting bilateral trade.

On the eve of the summit, President Sheikh Mohammed held meetings with leaders of South Korea’s top conglomerates, including Jay Y. Lee of Samsung Electronics, SK Group Chairman Chey Tae-won, and Kim Dong-kwan of Hanwha Group, a leading defense contractor. These meetings underscored the UAE’s interest in fostering strong corporate partnerships and exploring new business opportunities within South Korea.

While no new arms deals were announced during the summit, the discussions emphasized the intent to enhance long-term cooperation between the defense industries of the two countries. This is in line with South Korea’s ambitious goal to become the world’s fourth-largest defense exporter by 2027, a plan that has already seen significant milestones.

A notable recent defense deal involves Poland, which has turned to South Korea to bolster its military capabilities amid the ongoing conflict in neighboring Ukraine. This highlights South Korea’s expanding influence in the global defense market and its ability to forge strategic defense partnerships beyond the immediate region.

In summary, the summit between South Korea and the UAE represents a pivotal step in strengthening the economic and strategic ties between the two nations. The agreements signed are poised to facilitate substantial trade and investment flows, fostering innovation and collaboration in sectors critical to the future growth and security of both countries.