UAE, European Union see progress in clinching trade deal

The UAE and the European Union are moving closer to a trade agreement that would give the emirates consolidated access to the world’s largest trading bloc while reinforcing the country’s own status as a global logistics hub.

A deal between the UAE and the EU could also be key to unlocking a wider agreement between the 27-member bloc and the Gulf Cooperation Council, a stop-start negotiation which has not yielded consensus in the 35 years since talks started.

Dr. Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, met with the EU’s trade chief Maros Sefcovic in Dubai on Wednesday to launch the talks officially over a potential Comprehensive Economic Partnership Agreement, the UAE’s framework for the dozens of trade deals it has made since 2021 to diversify its economy. 

During his visit to the emirate, Sefcovic also met with the private sector to discuss opportunities for increased investment flows. The EU currently accounts for $67.6 billion in non-oil trade with the Emirates, 8.3% of the UAE’s total trade.

Speaking to reporters alongside Sefcovic, Al Zeyoudi said the UAE wants to seal a deal with the EU “in a very short period, three to six months from now.”

The Emirati cabinet minister added he did not see the talks as a hurdle for a future EU deal with the GCC and noted that bilateral talks with New Zealand and South Korea had led to trade agreements with the GCC, Reuters reports.

“We are seeing it’s a flow which is going to be starting from here and moving to the GCC,” he said. “Usually, the blocs are much slower than the bilateral, and that’s why we’re starting here, so we can move quickly.”

Tracking Gulf newsmakers at the Milken summit in Beverly Hills

The Gulf is open for business — and on the move. That was the message from key Middle East players attending the Milken Institute Global Conference this week at the Beverly Hilton. 

The Circuit offers a roundup of newsmaking moments and soundbites from the annual gathering of the world’s financial elite. 

Saudi Arabia’s Minister of Investment Khalid Al-Falih issued a broad invitation for business leaders to visit his country. In a conversation on Tuesday with Dina Powell McCormick, Vice Chairman of BDT & MSD Partners, Al-Falih touted the largest Gulf state as a source for financing in fields from artificial intelligence to sustainable energy.

“Globally leading VCs are flocking to the kingdom,” Al-Falih said, adding: “We’re also attracting global innovators to come to the kingdom to scale up their innovative companies and startups.”

Al-Falih, who also pitched Saudi Arabia’s futuristic Neom project and other mega-developments, didn’t stop at the kingdom’s borders, presenting the six countries of the Gulf Cooperation Council as a safe haven amid conflict across the Middle East.

“I’m not exaggerating when I say Saudi Arabia and the rest of the GCC are actually leading the world and trying to find pragmatic implementable solutions to address the climate challenge and to create opportunities out of the energy transition,” Al-Falih said, pronouncing the Arabian Peninsula “ripe for benefiting foreign investors.” Later in the day, the Minister stopped by a party hosted by Invest Saudi, the kingdom’s foreign investment arm, held on the sidelines of Milken. 

Meanwhile, Saudi Arabia’s new $100 billion investment fund Alat wants to win the trust of both U.S. tech and government leaders. Following up on the political terms that paved the way for Microsoft to invest $1.5 billion last month in Abu Dhabi-based artificial intelligence firm G42, Alat CEO Amit Midha said Saudi Arabia is willing to sell its China holdings if asked by Washington.

“So far the requests have been to keep manufacturing and supply chains completely separate, but if the partnerships with China would become a problem for the U.S., we will divest,” he told Bloomberg in an interview on the sidelines of the conference. Midha said Alat, which is focused on AI and semiconductors, will announce partnerships with two U.S. tech companies by the end of June, and will co-invest alongside a U.S. investment firm. He did not identify the companies.

Sarah Al Suhaimi, Chair of the Board of Saudi Tadawul Group, extended an invitation to Milken attendees to visit the kingdom and the region: “If you’re getting to know us from far away you will be mostly misguided,” she said.

Mubadala, the Abu Dhabi sovereign wealth fund, is preparing to launch a mental healthcare company in the U.S. Alaa Halawa, Mubadala’s Head of U.S. Ventures said on a panel at the Milken conference on Wednesday that the new firm will be geared toward young adults.

Oscar Fahlgren, Chief Investment Officer and Head of Brazil for Mubadala Capital, spoke about the fund’s confidence in the future of biofuels on a panel, days after he disclosed a planned $13.5 billion biofuel project in Brazil.

Khalfan Belhoul, CEO of the Dubai Future Foundation, quipped on a Milken panel that “leaders are a Whatsapp away” in the UAE as he talked about agile policymaking in the GCC. The bloc needs to make it easier for startups to scale outside their home markets, he added.

Mohammed El-Kuwaiz, Chair of the Board of the Capital Market Authority of Saudi Arabia, addressed the Gulf’s growth story amid the energy transition. “We’re known as oil exporters, but our second biggest export is capital,”  El-Kuwaiz said on Monday, fielding questions from The Economist’s Editor-in-Chief Zanny Minton Beddoes.

“For the first time in our history we may be capital importers,” El-Kuwaiz said, as the kingdom looks to lure foreign capital to help fuel the $3 trillion of investment from now until 2030 for its economic diversification drive. The money is being poured into developing sectors like tourism, manufacturing and tech alongside mega-projects like NEOM. “The capital markets are an extremely important fulcrum,” he said.