As the world adjusts to the trade shockwaves triggered by U.S. tariffs, Brussels and Abu Dhabi are forging a new path. On Thursday, the European Union and the United Arab Emirates confirmed they will launch formal negotiations on a free trade agreement.
The announcement followed a phone call between European Commission President Ursula von der Leyen and UAE President Sheikh Mohamed bin Zayed Al Nahyan, both sides said in separate statements.
The decision comes at a time of global economic uncertainty, just days after President Donald Trump raised import duties, only to scale some of them back under pressure from markets and trade partners. For the EU and UAE, the move signals a clear intention to deepen economic ties and sidestep instability.
The talks will aim to cut tariffs and trade barriers, open up market access for goods and services, and strengthen cooperation in sectors such as renewable energy, green hydrogen and critical raw materials, according to the EU.
The UAE's state news agency WAM called the agreement a step toward a Comprehensive Economic Partnership Agreement, one that could unlock opportunities in advanced manufacturing, logistics, healthcare and artificial intelligence. The pact is also expected to promote bilateral investment and long-term commercial growth.
The European Union is already the UAE’s second-largest trading partner, making up 8.3 percent of its total non-oil trade. It is also the Emirates’ top export destination and largest investment source in the Middle East and North Africa.
Abu Dhabi has pushed for deeper economic ties with Europe for years, and Reuters reported in March 2024 that the UAE had been quietly urging Brussels to start direct trade talks, independently of the Gulf Cooperation Council.
Now, those talks are becoming reality.
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