CANBERRA, 16 March 2005 — Australia and the United Arab Emirates (UAE) agreed yesterday to begin negotiations on a bilateral free trade agreement (FTA) that Canberra said would be a “launchpad” for expanded business opportunities across the Middle East.
Trade Minister Mark Vaile announced the decision alongside his UAE counterpart, Sheikha Lubna Khalid Al-Qassimi, following two days of talks and officials said the goal was to complete a deal by next year. “Australian exporters can expect big gains and opportunities from a prospective free trade agreement with the Emirates,” he said. “The Emirates is a regional financial and transportation hub, the Singapore of the Middle East if you like, and a launchpad into the Gulf and Middle East markets.”
The ministers said they had agreed to work toward securing a substantial, comprehensive FTA covering goods, services and investment. It marks the first attempt by Australia to reach a free trade accord with a Middle East nation.
The conservative government of Prime Minister John Howard has recently signed FTAs with the United States, Thailand and Singapore and is currently negotiating alongside New Zealand on an FTA with the 10-member Association of Southeast Asian Nations (ASEAN).
Howard is also expected to announce the launch of free trade talks with China during a trip to Beijing next month and plans are underway to enter negotiations with Malaysia. UAE is Australia’s second largest trading partner in the Middle East after Saudi Arabia, with total two-way trade in 2004 of 3.7 billion dollars ($2.9 billion).
The UAE imports large quantities of Australian motor vehicles, agricultural commodities and metals while Australian purchases from the UAE are dominated by petroleum and, to a growing extent, liquefied natural gas. “Our economies are broadly complementary and both countries will benefit from a reduction in barriers under an FTA,” Vaile said.
Al-Qassimi also said the free trade agreement could lead to broader business opportunities for Australia in her region. “We think this particular FTA would probably help in getting a pan-Gulf area of trade agreement,” she told reporters. As the UAE is already a low-tariff nation, most of the focus is expected to be on the services sector.
Al-Qassimi said that since the UAE already had low tariffs on imported merchandise, it was looking to extend links into Australia, including in financial services, universities and petrochemicals. “Instead of focusing on sectors of commodities, we are actually working through the services. And the interesting thing about the services you can always create more as you go along,” she said.
In ministerial talks alongside yesterday’s meeting on trade, UAE Transportation Minister Sultan ibn Saeed Al-Mansouri sought to increase access to the Australian market for Dubai-based carrier Emirates Airlines.
Emirates already has access to Perth, Melbourne and Sydney, but wants better access, particularly into the growing tourist destination of Brisbane. “There is a continuous demand for the number of flights that is needed for the different destinations in Australia and beyond,” he said. The two sides also agreed to cooperate in the battle against international financial fraud and illegal securities activities.