UAE and Peru to Commence Talks on Free-Trade Agreement

The United Arab Emirates (UAE) and Peru have revealed plans to initiate discussions for a free-trade agreement later this year, marking a notable stride towards bolstering economic cooperation between the two nations. The announcement, unveiled during the World Trade Organization Ministerial Conference (MC13) in Abu Dhabi, signals a deepening of bilateral relations and underscores a commitment to fostering closer ties. This latest development follows Peru’s recent decision to establish an embassy in the UAE, further solidifying diplomatic relations. Additionally, both countries had previously sealed agreements, including an aviation pact reached last year.

Exploring New Avenues in Trade

The prospective free-trade agreement carries significant implications for both Peru and the UAE. It would represent Peru’s inaugural trade deal with a nation in the Middle East and North Africa region, while simultaneously marking the UAE’s first trade accord with a country in the Americas. In the past year, bilateral trade between Peru and the UAE exceeded $1 billion, with Peru exporting goods valued at $1.03 billion and importing items worth $44 million. Peru is keen to leverage the potential agreement to enhance its exports to the UAE, particularly targeting the significant demand for food and manufactured goods in the Emirates.

On the other hand, the UAE’s exports to Peru are primarily petroleum-based products, alongside some manufactured items, suggesting potential avenues for diversification and expansion. Notably, DP World, a prominent UAE-based company, has made substantial investments exceeding $700 million in Peru’s logistics infrastructure since 2018, laying the groundwork for improved trade and economic collaboration.

Beyond Trade Enhancements

The proposed free-trade agreement holds strategic importance for both nations beyond the realm of commerce. It offers access to broader markets and opportunities for increased trade and investment flows. Peru’s existing trade agreements with major economies like China, the European Union, and the United States further bolster its position as an attractive trade partner.

Moreover, the UAE’s pursuit of free-trade agreements beyond its immediate region underscores its commitment to global expansion and the diversification of trade partnerships. While negotiations with Peru progress bilaterally, the UAE is actively exploring similar opportunities with other countries, including Guyana and members of the Southern Common Market, such as Argentina, Brazil, Paraguay, and Uruguay. This proactive approach aligns with the UAE’s broader economic strategy of fostering international trade and investment.

Looking Ahead

As discussions for the free-trade agreement unfold, both Peru and the UAE are poised to capitalize on the economic opportunities it presents. With a shared commitment to deepening bilateral cooperation, stakeholders from both nations remain optimistic about the potential benefits of a comprehensive trade agreement. The upcoming negotiations signify a new chapter in the economic partnership between Peru and the UAE, offering prospects for mutual growth and prosperity.