If materialized, the Comprehensive Economic Partnership Agreement or CEPA with the United Arab Emirates will be a milestone for the Philippines, as it will be the country's first free-trade agreement with a Middle Eastern country and a member of the Gulf Cooperation Council.
On 2 December 2023, Department of Trade and Industry Secretary Fred Pascual signed the Terms of Reference or TOR for the negotiations of a CEPA with UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi as part of DTI's side activities at the Conference of the Parties (COP) 28.
The TOR for the negotiations of the CEPA is the first step towards the proposed bilateral free trade agreement with the UAE.
Also, the TOR provides guidelines on the conduct of the negotiations and the scope and coverage of the proposed CEPA.
The CEPA is envisioned to expand the flow of goods and services exports to the UAE and the greater Gulf region, generate more investments from the UAE, and create more opportunities for professionals and service providers in the Middle-Eastern country.
"It is worthy to note that the current policy direction of the country is really to expand our FTA network. In other words, more than forging FTA with our major trading partners, we have to venture to other non-traditional partners, and UAE is one promising trade and investment partner," said chief negotiator for CEPA, Undersecretary Alan Gepty in a press conference on Monday in Makati.
The UAE is the Philippines' 17th largest trading partner and the top export market among all Gulf Cooperation Council member states.
Additionally, the UAE is the second home to one of the largest populations of overseas Filipinos in the Middle East, as well as well-known and home-grown Filipino brands and businesses.
ASAP formalization
For his part, Pascual said the sealing of the CEPA-FTA with the UAE is deemed to be formalized as soon as possible, as they want to enhance our trade and investment partnership.
"But given the experience of trade agreement negotiations of UAE with other ASEAN member states, we are hoping to make the negotiations swiftly. We are eyeing for the first quarter of next year to commence the negotiation. And then, moving forward, if the issues are not contentious, then at least within two years we can conclude the negotiations," Gepty told reporters.
Meanwhile, the special envoy of the President to the UAE for trade and Investments, Norman Vincent Wee said during a recent trip to and meetings in the UAE last week that the Emiratis have a very positive experience with Filipinos in their country.
"They have welcomed our countrymen in their businesses and homes and consider us their closest country in Asia. In the last few years, the UAE has been investing in other developing countries, and the Philippines must take advantage of this trend so that more than just a destination for our OFWs, UAE can become a source of investment funds and financing," he said.
Wee said UAE investments tend to be sticky and long-term, with areas of interest in renewable energy, ports and logistics, food security, digitalization, and data centers.
"To capitalize on this, bilateral agreements signal our openness to their investments and leverage the strong ties established by our OFWs. The recent trip of Secretary Fred Pascual to the UAE has been important, particularly in securing the ratification of the Investment Promotion and Protection Agreement or IPPA and the signing of the CEPA. The Philippines is on the short list of their investment countries, with our 115 million population and young demographics," according to Wee.
The UAE and the Philippines signed the IPPA on 9 June 2022 tapping Dubai investments in terms of agribusiness and agriculture, energy efficiency technology and renewable energy, infrastructure and public-private partnership projects, artificial intelligence, information technology, and business process management and shared services, manufacturing, oil and gas, processed and specialty food, and tourism and hospitality, expected to create 2,500 jobs and over P7.1 billion worth of investment, according to then-Trade Secretary Ramon Lopez, days before he relinquish his post.