(MENAFN- The Arabian Post)

Abu Dhabi has become the newest member of a 14-country initiative called the Future of Investment and Trade Partnership, a coalition committed to defending“open and free” trade in response to rising global protectionism.

The partnership, unveiled with a joint declaration, seeks to tackle barriers that impede cross-border commerce, amplify foreign direct investment, and ensure that trade rules are inclusive and transparent. Its launch reflects growing concern over the risks posed by high tariffs, increasing economic fragmentation, and rising non-tariff trade hurdles.

Founding members include Brunei, Chile, Costa Rica, Iceland, Liechtenstein, Morocco, New Zealand, Norway, Panama, Rwanda, Singapore, the UAE and others. FIT-P intends to work on reducing trade distortions, promoting digital trade mechanisms, and establishing shared norms around investment climate and trade practices.

The UAE's Foreign Trade Ministry said the nation's commitment to the partnership underscores its strategy to become a global trade hub. The government emphasised that inclusive growth and resolving emerging trade issues will be central to the FIT-P agenda. Among key concerns cited are the effects of United States tariff policies, which have prompted fears of a trade war and elevated risks that the global economy will become more fragmented. The FIT-P statement specifically warns that“measures that restrict trade risk fragmenting the global economy.”

Trade analysts point out that FIT-P complements a growing number of bilateral and multilateral agreements that countries are pursuing to hedge against risk. For instance, the UAE has separately initiated formal negotiations with the European Union for a bilateral Free Trade Agreement aimed at lowering tariffs, easing market access for goods and services, and enhancing co-operation in sectors like renewable energy and critical raw materials.

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Critics caution that such coalitions face challenges. Differing national interests among FIT-P members-especially around non-tariff regulatory standards, digital trade rules, and labour or environmental clauses-could hamper efforts to reach binding agreements. Some countries are also wary of how FIT-P will interact with existing trade frameworks such as the World Trade Organization, regional free trade agreements, and bilateral deals.

Economic data show global goods trade growth projections have been revised downwards, reflecting implications from supply chain disruptions, inflation, and trade barriers. The FIT-P initiators argue that restoring predictability in tariffs and regulatory policies is vital for business confidence and investment flow.

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