UAE, Japan reach final terms of comprehensive economic partnership agreement

TOKYO - The United Arab Emirates and Japan  have reached  final terms  of a comprehensive economic partnership agreement, UAE's  state news agency reported on Friday.

The agreement, confirmed during high-level talks in Tokyo, aims to eliminate tariffs on key exports and foster deeper economic cooperation, even as the region grapples with the fallout from the ongoing US-Iran conflict.

The confirmation came during a meeting between Japanese Foreign Minister Toshimitsu Motegi and UAE Minister of Industry and Advanced Technology Sultan Al Jaber. 

The ministers formalized the conclusion of negotiations, paving the way for the CEPA to take effect once domestic ratification procedures are completed in both countries. This milestone follows multiple rounds of discussions, with the seventh and final session held in January 2026, as outlined by Japan's Ministry of Foreign Affairs.

Under the terms of the agreement, the UAE will phase out tariffs on major finished vehicles imported from Japan within seven years of the pact's implementation. This provision is particularly advantageous for Japanese automakers, who already dominate the UAE's vehicle market. 

In comparison, South Korea's earlier CEPA with the UAE stipulates a 10-year timeline for similar tariff eliminations, giving Japan a competitive edge in the rapidly growing Emirati economy. 

Japanese officials highlighted the deal's role in capturing expanding demand in the UAE, a strategic hub for trade and investment in the Middle East.

Beyond trade, the ministers agreed to enhance collaboration in critical areas, including ensuring the safety of shipping through the Strait of Hormuz—a vital artery for global oil transport currently disrupted by Iranian actions amid the escalating conflict. They also committed to protecting Japanese nationals in the region, where tensions have led to attacks on energy facilities and civilian vessels. Foreign Minister Motegi condemned Iran's retaliatory strikes, noting their impact on civilian lives and regional stability, while expressing Japan's intent to broaden cooperation across various sectors.

This CEPA aligns with the UAE's broader strategy to forge economic partnerships worldwide, having signed 27 such agreements by early 2025, including with India, the Republic of the Congo, and others. For Japan, the deal represents a strategic pivot toward diversifying trade ties beyond traditional partners, especially in light of global supply chain vulnerabilities exposed by recent geopolitical events.

Analysts view the agreement as a timely economic anchor amid the Middle East's volatility, potentially streamlining cross-border investments, technology transfers, and collaboration in sectors like clean energy, AI, and advanced manufacturing. 

With negotiations initially targeted for completion by the end of 2025, the swift finalization underscores the mutual commitment to bolstering ties forged under the 2022 comprehensive economic partnership framework.