On October 28, 2024, after a year plus of negotiations, Vietnam and the UAE sign the Comprehensive Economic Partnership Agreement (CEPA)

CEPA a catalyst for signing news FTAs

On October 28, 2024, after a year plus of negotiations, the Comprehensive Economic Partnership Agreement between Vietnam and the UAE was officially signed. This is the first free trade agreement (FTA) Vietnam has signed with an Arab country, opening a new chapter in economic and trade cooperation between Vietnam, the UAE, and the Middle East-African region.

The agreement has far-reaching influence, creating a significant impact on the Arabian Peninsula and serving as a catalyst for signing FTAs with other countries worldwide. Furthermore, the signing of CEPA after a year plus of negotiations sets a new milestone, highlighting the Ministry of Industry and Trade’s initiative and leadership in connecting international economic cooperation.

Chief of the Office of the Interagency Steering Committee for International Economic Integration Trinh Minh Anh emphasized that with the determination and efforts of the Ministry of Industry and Trade and other relevant ministries, CEPA was finalized at an impressive pace within a year. It underwent five official negotiation rounds, including three in-person ministerial-level rounds, clearly demonstrating the commitment to elevating trade and investment cooperation between the two sides to a new level.

During the ministerial-level negotiation round on July 30, 2024, held at the headquarters of the Ministry of Industry and Trade, Minister of Industry and Trade Nguyen Hong Dien and UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi both acknowledged that CEPA serves as a crucial lever for Vietnam to capitalize on trade and investment opportunities in the Middle East. Even while the agreement was still under negotiation, several major Vietnamese corporations had anticipated the opportunities provided by CEPA to implement investment and business activities in the UAE. Meanwhile, UAE investors were also exploring large-scale investment projects in Vietnam.

About a month later, on August 26, 2024, Minister Nguyen Hong Dien had another direct negotiation session with the UAE Minister of State for Foreign Trade. During that month, the UAE Ministry of Economy organized a delegation of leading UAE businesses to visit Vietnam and explore investment opportunities, particularly in energy, energy transition, infrastructure, and logistics.

This held significant importance, aiming to seize opportunities for UAE enterprises in Vietnam after CEPA’s signing and implementation. It also reflected the UAE’s strong determination to push forward and finalize an FTA with Vietnam.

Realizing potential and leveraging CEPA opportunities

Minister of Industry and Trade Nguyen Hong Dien expressed optimism that the agreement will serve as a significant lever for Vietnam to capitalize on trade and investment opportunities in the Middle East. This region is home to dynamic, large economies, but had been overlooked by Vietnamese enterprises in the past. Additionally, the UAE serves as a critical trade gateway in the Middle East, with the potential to connect Vietnam to numerous other countries in the region. Through the UAE, Vietnamese products can easily access major markets, such as Saudi Arabia, Qatar, and Kuwait, as well as some countries in North Africa and West Asia.

With CEPA, a “broad road has been opened,” significantly widening the export pathway to the UAE specifically and the Middle East region in general. To fully leverage the incentives and advantages of this agreement, businesses need to take the initiative in learning about its commitments and thoroughly understand the business practices of the UAE and the broader Middle Eastern market.

To realize the commitments under the Vietnam-UAE CEPA, the Ministry of Industry and Trade will soon develop a detailed CEPA implementation plan, focusing on the following main task groups:

CEPA dissemination: The Ministry will enhance efforts to raise awareness and provide information about CEPA.

Legislation and institutional development: The Ministry will collaborate with other relevant ministries and agencies to draft, amend, and/or supplement legal documents in alignment with CEPA’s commitments. This includes submitting these documents for approval at various levels of authority as per the agreed timeline. Key deliverables include

a government decree on the issuance of CEPA’s special preferential import tariff schedule applicable to the UAE, and a circular on CEPA’s rules of origin.

Enhancing competitiveness and workforce development: The Ministry will coordinate with other ministries to implement comprehensive initiatives, such as developing support programs to boost the competitiveness of industries and enterprises. This will help businesses explore and penetrate new export markets in the region./.