Two countries coming together for their mutual economic interests during a crisis and doing what is best for them opens a new world of possibilities
The UAE-India Comprehensive Economic Partnership Agreement (CEPA) that came into effect on Sunday is a precursor to similar trade deals that Abu Dhabi is sewing up with other countries that could allow free movement of goods with zero tariffs. This development could also usher in Globalisation 2.0, where bilateral pacts could take precedence over broader global deals and could propel free trade to the next level, though such pacts aren’t without their fair share of critics who say that they are limiting in scope and nationalistic in nature.
The UAE’s deal with New Delhi was done in record time during the pandemic when global supply chains were impacted and some essentials were in short supply. Jobs were lost and industry was in the doldrums. The world was caught unawares and global bureaucracy was slow to react to what individual countries needed.
Hence, two countries coming together for their mutual economic interests during a crisis and doing what is best for them opens a new world of possibilities which is precisely what the next wave of globalisation, or Globalisation 2.0 is all about.
The UAE has plans for similar deals with seven other countries. India and the United Kingdom, meanwhile, are working on their version of the CEPA that could see a fresh wave of investments and business activity between both sides.
Other countries are expected to take a leaf out of these agreements to stitch together pacts that suit their businesses and interests. The takeaway from the development is this: one-size globalisation does not fit all; countries who are unafraid to experiment and are coming out of their regional shells and partnering with like-minded nations they can trust and have done business with over decades.
Governments have a commitment to their people and they will do what they have to do with countries of their choosing to further people’s welfare. Here, the UAE and India’s interests align at various levels. A patchy trade relationship from the 50s that was built on spices, textiles, and oil became a people’s relationship in the seventies and eighties.
Government-to-government contacts were boosted in the 2000s and there has been no looking back from 2014. Bilateral visits by the leaders of the two countries elevated the relationship further. Comprehensive strategic ties were soon forged and the rest as they say is the historic Comprehensive Economic Partnership Agreement.
Under this deal, bilateral non-oil trade could see a jump to $100 billion from the current $60 billion in five years, but industry sources said that figure could be achieved in 2-3 years. New Delhi will offer preferential access to the UAE on over 90 per cent of its tariff lines.
The UAE has provided preferential market access to India on 97 per cent of its tariff lines which is 99 per cent of exports to the UAE in value terms. This deal is a win-win for both countries with new investments creating jobs and improving the lives of people in both countries. It signifies an improved and close-knit globalisation — with long-term friends and partners.