Uaeazerbaijan Cepa Enters Force As Trade Hits $2.2B

(MENAFN- Khaleej Times) The UAE has brought into force a new Comprehensive Economic Partnership Agreement (Cepa) with Azerbaijan, strengthening its fast-expanding global trade architecture and advancing its strategy to position the country as a central hub linking Asia, Europe and emerging Eurasian markets.

The agreement is expected to accelerate bilateral trade, deepen investment flows and create fresh opportunities for private-sector partnerships in logistics, renewable energy, advanced manufacturing and professional services.

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Non-oil trade between the two countries has already risen by 31.4 per cent over the past two years to exceed $2.2 billion in 2025, underscoring strong momentum ahead of implementation.

Officials said the Cepa will eliminate or reduce tariffs on a wide range of goods and services, expand market access for exporters and support collaboration between small and medium enterprises in both countries. It also marks Azerbaijan's first trade agreement to include a dedicated services chapter, opening opportunities in finance, consulting, construction and other knowledge-based sectors.

Dr Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, said the agreement represents a major step forward in bilateral economic ties.“The implementation of the UAE–Azerbaijan Cepa marks a transformative milestone in our economic relationship. It will enhance trade flows, unlock new investment opportunities and foster deeper private-sector collaboration across key sectors,” he said.

The minister highlighted Azerbaijan's strategic location along emerging North–South transport corridors linking Central Asia, the Caucasus and Europe, noting that closer integration between the two economies will strengthen supply-chain resilience and support sustainable growth.

The UAE is currently Azerbaijan's largest Arab trading partner, accounting for about 40 per cent of its trade with the Middle East and North Africa region, while Emirati investments in Azerbaijan have exceeded $1 billion, making the UAE the leading Arab investor in the country.

The agreement adds further momentum to the UAE's ambitious Cepa programme, one of the most extensive bilateral trade initiatives undertaken by any emerging economy. Since launching the programme in 2021, the UAE has signed agreements with India, Indonesia, Israel, Turkey, Cambodia, Georgia, Costa Rica, Colombia, Mauritius, South Korea and the Republic of Congo, in addition to Azerbaijan. Several more negotiations are under way with key partners across Asia, Africa and Latin America.

Together, these agreements are designed to expand market access for Emirati exporters, attract foreign investment, strengthen supply-chain integration and reinforce the country's role as a gateway connecting major growth regions across three continents.

The Cepa programme forms a central pillar of the UAE's broader economic transformation strategy, which aims to increase non-oil foreign trade to $1 trillion annually by 2031 and lift national GDP to more than $800 billion over the same period. Policymakers see diversified trade corridors as critical to sustaining long-term growth and insulating the economy from external volatility.

Economists say agreements such as the Azerbaijan CEPA also support the UAE's push to expand its footprint across emerging logistics and energy transition routes spanning Central Asia and the Caspian region, complementing its established trade links with Asia, Europe and Africa.

With bilateral trade already expanding rapidly and new tariff reductions set to take effect, the agreement is expected to create immediate opportunities for exporters and investors while reinforcing the UAE's position as one of the world's fastest-growing trade connectivity hubs.

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