S. Korea, UAE forge comprehensive economic partnership pact
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Yonhap | 29 May 2024
S. Korea, UAE forge comprehensive economic partnership pact
by Kim Eun-jung
SEOUL, May 29 (Yonhap) — South Korea and the United Arab Emirates signed a comprehensive economic partnership agreement (CEPA) freeing up trade between the two countries Wednesday after President Yoon Suk Yeol and UAE President Mohamed bin Zayed Al Nahyan held summit talks in Seoul.
The two countries also signed a memorandum of intent calling for South Korea to build at least six liquefied natural gas (LNG) carriers worth some US$1.5 billion, while the UAE’s sovereign wealth fund and companies reaffirmed their commitment to invest a combined $30 billion in South Korea.
The CEPA is a type of free trade agreement that emphasizes a broader scope of economic cooperation and exchanges in addition to market opening, which requires parliamentary ratification to take effect. The UAE is the first Arab nation to sign a free trade deal with South Korea.
Under the agreement, the two countries will lift tariffs on more than 90 percent of most goods, including cars, auto parts and defense items, over the next 10 years. It also includes provisions for opening cultural services and the online game market.
The government anticipates that the trade pact with the UAE will boost South Korean companies’ presence in the Middle East.
Mohamed arrived in Seoul on Tuesday for a two-day state visit to discuss ways to deepen cooperation in trade and investment in a wide range of areas. He is the first UAE president to make a state visit to the Asian nation.
During Wednesday’s talks attended by senior government and state-run companies, the UAE reiterated its plan to invest $30 billion in South Korea, which was announced during Yoon’s visit to the Middle Eastern country in January 2023.
The two sides signed 19 business deals and memorandums of understanding (MOUs) encompassing investment, energy, nuclear power, defense, technology, climate change and cultural exchanges.
The UAE’s sovereign wealth fund, Mubadala Investment Co., and other companies unveiled plans to invest over $6 billion in South Korea, signing an MOU with the Ministry of Economy and Finance on expanding the investment cooperation framework.
The state-run Abu Dhabi National Oil Company signed a letter of intent with two Korean shipbuilders, Samsung Heavy Industries and Hanwha Ocean, to build at least six LNG carriers worth $1.5 billion.
Both nations also agreed to bolster the joint crude oil storage project and collaborate on hydrogen projects to enhance energy sector cooperation.
Mohamed’s visit to South Korea was welcomed by a series of business meetings and cultural events.
During an official ceremony ahead of the summit, the Air Force’s Black Eagles acrobatic team demonstrated a flight to honor the UAE president’s first visit to South Korea.
Traditional honor guards, ceremonial bands and members of the Akh unit, South Korean troops dispatched in the UAE, also staged performances at the presidential office.
On Tuesday, South Korea showed its respect by sending four Air Force F-15 fighter jets to escort the UAE president’s plane after it entered the country’s air defense identification zone.
Later in the day, Mohamed held meetings with top South Korean business leaders, including Samsung Electronics Co. Chairman Lee Jae-yong, Hyundai Motor Group Chair Euisun Chung and SK Group Chairman Chey Tae-won. He also met with Bang Si-hyuk, chairman of Hybe, the entertainment agency of K-pop group BTS; and Kim Taek-jin, CEO of leading gaming firm NCSoft.
Bilateral trade between the countries reached $20.8 billion in 2023, a significant increase from $190 million in 1980, making the UAE South Korea’s 14th-largest trade partner.
In 2022, the UAE signed a deal to purchase the Cheongung II midrange surface-to-air missile system, a key element of South Korea’s multilayered anti-missile program.
South Korea has built four nuclear power plants in Barakah under a $20 billion contract in 2009, marking the country’s first overseas nuclear project.
