Japan aims to expand auto exports to UAE via trade pact
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Nikkei Asia | 19 septembre 2024
Japan aims to expand auto exports to UAE via trade pact
by ANNA NISHINO
TOKYO — Japan and the United Arab Emirates on Wednesday agreed to start negotiations on an economic partnership agreement, as Tokyo hopes to boost its automobile and machinery exports while promoting investment in energy.
Japan’s exports to the UAE totaled 1.57 trillion yen ($11.1 billion at current rates) in 2022. The Middle Eastern country levies a 5% tariff on many items, including autos, and these account for about 60% of the total. Japan hopes to negotiate a reduction or elimination of these duties in the partnership agreement.
In addition to cars and energy, the two sides look to promote investment in digital technology and health care. They also look to promote free movement of data.
Oil and fuel made up 95% of Japan’s 6.07 trillion yen in imports from the UAE in 2022. No tariffs applied to more than 98% of these imports.
Abu Dhabi is pursuing economic partnership agreements with various countries, looking to become a regional hub for trade and investment as the country seeks to reduce its economic dependence on the energy sector. Since 2022, the UAE has inked deals with nations including India, Indonesia, Chile and Kenya, and is in talks with New Zealand.
Japan’s business community is pushing for more partnership agreements with Middle Eastern countries. The UAE signed a trade deal in May with South Korea, which competes with Japan on many export products including autos and machinery.
Tokyo has agreed to reopen negotiations this year for a free trade agreement with the six-nation Gulf Cooperation Council, of which the UAE is a member. This still allows for talks with individual members in parallel, and Japan hopes to make bilateral deals as steps toward a higher-level agreement.
The UAE has taken a balanced approach in diplomacy, focused on diversifying its economy.
While Abu Dhabi traditionally favors the U.S., it also has maintained close trade and investment ties with Russia even after Moscow was shunned by the West following the invasion of Ukraine. The UAE is cooperating more closely with China in telecommunications and energy.
The UAE established diplomatic relations with Israel under the Washington-brokered Abraham Accords signed in 2020. While Abu Dhabi has criticized the actions of Israel’s military in the war in Gaza, it has maintained bilateral ties.
