The United Arab Emirates (UAE) and the Republic of Türkiye (Türkiye) Comprehensive Economic Partnership Agreement (CEPA) was signed on 3 March 2023 and officially entered into force on 1 September 2023. To enforce CEPA, UAE Federal Decree No. 91 of 2023 and a notice from the Federal Authority for Identity, Citizenship, Customs, and Port Security were issued.
CEPA aims to strengthen economic relationships and increase bilateral trade between the UAE and Türkiye by establishing a free trade area, eliminating or reducing tariffs, removing trade barriers, and providing a favorable climate for trade.
As an all-inclusive agreement, CEPA addresses trade in goods and services, protection of intellectual property rights, government procurement, competition, digital trade, and investment facilitation with the aim of promoting trade and investment.
The agreement has been outlined in 18 chapters with several clarifying annexes attached, covering various aspects of trade and investment between the two countries. Chapters 2, 3, 4, 5, 6 and 7 address different aspects related to trade in goods including technical barriers to trade, Customs procedures and trade facilitations, originating goods and are, accordingly, the most relevant from customs and global trade perspective.
For more than 90% of the goods traded between the two countries, CEPA offers preferential treatment in the form of tariff elimination or reduction. CEPA accordingly provides better market access for UAE products to Türkiye, covering more than 83% of tariff lines and 93% value of trade with Türkiye.
CEPA specifies three categories of Preferential Tariff Rates, which vary depending on the type of goods. These categories include:
To avail the above preferential treatment, it is imperative to adhere to the Rules of Origin stipulated in chapter 7 of the CEPA.
According to such provisions, a product must fulfill one of the following origin criteria to be eligible for the benefits:
Compliance with the Rules of origin must be substantiated by a proof of origin (i.e., certificate of origin, whether in paper or electronic format or an origin declaration made by an approved exporter). If non-compliance with the Rules of Origin is established, preferential treatment will be denied, duties will be levied and penalties will be imposed.
In order to liberalize trade in services, CEPA dedicates chapter 8 and its annexes to trade in services, ensuring enhanced market access for service providers in both countries.
It covers 12 service sectors regarding Turkey and 11 service sectors for UAE along-with the schedules of specific commitments for both the parties.
The covered 12 sectors are generally as follows:
CEPA emphasizes on reducing and simplifying customs procedures and adopting international best practices for customs management such as (Illustrative):
To conclude, UAE businesses can, as illustrated above, enjoy many benefits under CEPA, including:
For more information regarding CEPA, please refer to the link from the website of Ministry of Economy, UAE.
Our team of professionals undertake an impact assessment for your business to ascertain extent of imports and exports made between Türkiye and the UAE, and how the CEPA impacts these trades. This will cover:
As such, it is imperative to agree on a detailed action plan and next steps for CEPA impact assessment. Fully acknowledging the actions may be different for goods and services.