The Philippines marked a major milestone in its foreign economic policy with the signing of the Comprehensive Economic Partnership Agreement (CEPA) on 13 January, sealing the country’s first free trade deal in the Middle East.

According to the Department of Trade and Industry, the agreement secures smoother trade flows and promotes a high-growth environment through expanded market integration and stronger cross-border cooperation.

The CEPA was signed by Trade and Industry Secretary Cristina Roque and United Arab Emirates Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi, in the presence of President Ferdinand Marcos Jr. and UAE President Mohamed bin Zayed Al Nahyan.

Roque said the CEPA reflects the administration’s strategy of using trade policy to strengthen the country’s long-term economic position.

“Following President Ferdinand R. Marcos Jr.’s directive, we are using strategic trade deals to move Philippine businesses into higher-value markets and more integrated supply chains. In doing so, the CEPA gives our exporters and service providers a stable platform in the Middle East and sends a strong signal that the Philippines is open for deeper, rules-based economic partnerships,” Roque said.

Under the agreement, around 95 percent of Philippine exports to the UAE will receive preferential tariff treatment, a move expected to help manufacturers expand exports, scale up production, and generate more jobs locally. Products set to benefit include personal care and cosmetic items, food products such as canned tuna and sardines, electronic equipment, automotive and aircraft parts, and textile and apparel goods.

The CEPA also establishes clearer and more predictable rules for businesses operating in key service sectors, including professional services, construction, retail, IT-BPM, and tourism. Officials said this improved business environment will support the expansion of Filipino service providers in the UAE while encouraging greater UAE investment in the Philippines.

Beyond traditional trade, the agreement opens avenues for cooperation in priority areas such as digital trade, MSMEs, and sustainable development. These include provisions on labor and environmental protection, intellectual property rights enforcement, competition and consumer protection, government procurement, and economic and technical cooperation.

In 2024, the UAE ranked among the Philippines’ top trading partners and served as a major export market in the Middle East, underscoring the significance of the CEPA as both countries deepen trade, services, and investment ties.

The Philippine government estimates that exports to the UAE could grow by 9.13 percent, or about $2 billion, based on 2024 levels.