UAE Becomes Vietnam First Comprehensive Partner in the Middle East

Vietnam and the United Arab Emirates (UAE) recently entered a transformative phase of diplomatic and economic collaboration, marked by the signing of a Comprehensive UAE Vietnam Partner Agreement (CEPA). This pivotal moment highlights the UAE’s strategic role as Vietnam’s first comprehensive partner in the Middle East, underscoring Vietnam’s growing influence in the region. Here, we break down how this partnership, hailed as a “milestone in UAE-Vietnam relations,” could reshape economic, cultural, and strategic landscapes for both nations, setting the stage for increased cooperation in the global arena.

Economic Implications

The CEPA, signed in late October 2024, is more than a diplomatic gesture. It represents a mutual commitment to economic growth through the liberalization of trade, investment, and access to new markets. Over the next decade, both countries aim to double their current trade volumes, targeting a substantial $10 billion in annual trade. This ambitious goal is supported by robust trade growth figures; between 2018 and 2023, bilateral trade surged to approximately $5 billion annually, with Vietnam enjoying a trade surplus thanks to its exports of mobile devices, electronics, and furniture. In 2023 alone, trade volumes reached nearly $4.7 billion, marking a 5.9% increase from the previous year, while in the first eight months of 2024, trade hit $4.47 billion—up by 45% year-on-year.

Under the CEPA, the UAE committed to a near-complete phase-out of tariffs on 99% of Vietnamese exports, including popular Vietnamese products such as electronics, seafood, textiles, and agricultural goods. In return, Vietnam has agreed to remove tariffs on 98.5% of UAE exports, giving the UAE an edge in supplying Vietnam with raw materials, petroleum products, and technology. This reciprocal tariff reduction is a game-changer, granting Vietnamese businesses access to the broader Middle Eastern, African, and Western Asian markets. The partnership also introduces measures to reduce non-tariff barriers, streamline customs, and promote investment in key sectors such as agriculture, manufacturing, and logistics.

Sustainability in UAE Vietnam Partner

One of the standout aspects of the UAE Vietnam Partner initiative in the CEPA is its forward-looking focus on sustainable development and innovation. In alignment with both countries’ green agendas, the partnership places a high priority on projects that drive environmental responsibility, circular economy practices, and digital transformation. The UAE, renowned as a hub for renewable energy and technology, offers expertise that could help Vietnam accelerate its green transformation initiatives. Vietnam, for its part, has been actively pursuing sustainable development goals and welcomes UAE investment in its renewable energy sector, particularly in wind, solar, and waste-to-energy technologies.

This collaboration also includes a substantial investment in digital transformation, with both nations committing to advancing digital infrastructure, e-commerce, and tech-based services. These initiatives are designed to support Vietnamese businesses’ transition to digital platforms, allowing them to compete more effectively in global markets. Notably, the UAE is a leader in fintech and digital banking, and its expertise could be instrumental as Vietnam continues to modernize its financial systems to meet the needs of a digital economy.

Halal Industry Development

Recognizing the UAE’s significant role in the global Halal market, the agreement includes specific provisions for the development of Vietnam’s Halal industry. This collaboration is expected to bolster Vietnam’s capabilities in producing Halal-certified products, creating a new revenue stream for Vietnamese companies. As part of the CEPA, both countries are developing plans to boost Vietnam’s Halal production standards and expand the market for Vietnamese Halal products in the Middle East and North Africa (MENA) region. The UAE serves as a gateway to these markets, where demand for Halal-certified food, pharmaceuticals, and personal care products is growing rapidly.

Vietnam, with its strong agricultural sector, has the potential to become a key player in the Halal food industry. The partnership’s focus on Halal certification and export facilitation aims to enhance Vietnam’s global competitiveness in this market. For example, the UAE will support Vietnam in setting up Halal certification bodies and training Vietnamese producers to meet international Halal standards. This effort is also aligned with the UAE’s vision of becoming a global center for Halal certification, a vision that positions both nations as leaders in the Halal industry.

Diplomatic Strengthening

Beyond trade and investment, the UAE-Vietnam CEPA is designed to foster closer cultural ties and people-to-people exchanges. Both countries have agreed to promote cultural exchanges, educational collaborations, and tourism, aiming to deepen mutual understanding and bring their peoples closer together. Plans include establishing a Vietnamese cultural center in the UAE, which would serve as a hub for Vietnamese art, cuisine, and traditional customs. Such initiatives are intended to build cultural bridges and celebrate the rich heritage of both countries.

Tourism is another area of focus. The UAE has become an increasingly popular destination for Vietnamese tourists, and, conversely, Vietnam’s appeal as a travel destination for UAE citizens is rising. Both governments are working to ease visa requirements and improve connectivity through direct flights, making it more convenient for citizens of each country to explore the other’s cultural and natural attractions. The UAE’s commitment to supporting a youth football academy in Vietnam is another example of how the partnership aims to strengthen cultural ties and provide opportunities for young people to connect across borders.

Community Support

Labor agreements are a vital component of the UAE Vietnam Partner initiative, particularly given the growing Vietnamese expatriate community in the UAE. Vietnamese workers contribute significantly to the UAE’s economy, especially in sectors like construction, hospitality, and healthcare. Under the new partnership, the UAE has pledged to create favorable conditions for Vietnamese nationals working in the country, including improved labor protections, fair treatment, and expanded opportunities for professional growth.

Both governments are also exploring initiatives to enhance the welfare of Vietnamese expats, from labor rights protections to community support programs. This includes establishing Vietnamese cultural centers and community associations that provide support and resources for Vietnamese workers and their families in the UAE. These initiatives reflect a broader commitment to ensuring the Vietnamese community’s integration and well-being, further strengthening the people-to-people ties that underpin this partnership.

Related: Halal Market Opportunities in MENA for Vietnamese Firms

Global Cooperation

The UAE-Vietnam partnership is not only a significant bilateral achievement but also a strategic move on the global stage. As Vietnam’s first comprehensive partner in the Middle East, the UAE reinforces its position as a gateway to the Middle East for Southeast Asian countries. This partnership could inspire other Asian nations to pursue similar agreements with the UAE, leveraging the UAE’s connections and resources to enter new markets. The UAE’s foreign policy has increasingly focused on strengthening ties with Asia, recognizing the economic dynamism of the region and its potential as a partner in sustainable development and innovation.

For Vietnam, the partnership reflects its broader foreign policy goals, including the diversification of its international relations and the pursuit of sustainable, equitable economic growth. The partnership provides a valuable platform for Vietnam to engage more actively with Middle Eastern and African nations, broadening its diplomatic reach and expanding its influence in regional and global forums. Both countries have also pledged to support each other in multilateral forums, collaborating on issues such as climate change, food security, and regional security.

A Model for Bilateral Success

The UAE-Vietnam Comprehensive Partnership represents a forward-thinking approach to diplomacy and economic cooperation. By addressing immediate needs—such as trade liberalization and labor protections—and prioritizing future-focused areas like digital transformation and green energy, both nations are establishing a partnership that benefits their citizens and economies alike. This agreement is a testament to the potential of cross-regional alliances to drive meaningful change and create new opportunities for prosperity.

As both countries move forward with implementing the CEPA, businesses in the UAE and Vietnam are expected to benefit from increased market access, reduced costs, and a supportive environment for innovation. This partnership could set a benchmark for other nations considering comprehensive agreements, especially those in Southeast Asia and the Middle East. For businesses, policymakers, and citizens in both countries, the UAE-Vietnam partnership signals a promising future marked by mutual growth, sustainable development, and closer cultural connections.

Through this historic agreement, the UAE Vietnam Partner are not only enhancing their bilateral relations but also setting an example for other countries on how to build resilient, future-ready partnerships. With clear goals, mutual respect, and a shared vision, the UAE-Vietnam Comprehensive Partnership is poised to become a model of success in international cooperation.