- AUS-UAE CEPA
Comprehensive Economic Partnership Agreement between Australia and the United Arab Emirates
2.1The Comprehensive Economic Partnership Agreement between Australia and the United Arab Emirates was referred to the Committee on 18 November 2024.
2.2The Committee received 20 submissions and held two public hearings in Canberra on 30 January 2025 and 5 February 2025. A list of submissions can be found at Appendix A. The hearings and witnesses are listed at Appendix B. The transcripts of evidence from the public hearings can be accessed through the Committee’s website.
Overview and background
2.3The purpose of the Comprehensive Economic Partnership Agreement between Australia and the United Arab Emirates (CEPA) is to establish Australia’s first trade agreement with the United Arab Emirates (UAE) and further diversify Australian trade. CEPA would eliminate tariffs on over 99 per cent of Australian goods exports to the UAE once fully implemented, estimated to increase Australian exports by around A$678 million per year.
2.4The UAE is Australia’s largest trade and investment partner in the Middle East, with two-way trade worth over A$9.94 billion and two-way investment worth A$20.6 billion in 2023. Australia and the UAE announced their intention to pursue a CEPA on 17 March 2022 and negotiated the CEPA from 13 December 2023 to 17 September 2024.
Justifications
2.5CEPA’s removal of tariffs would benefit a wide range of Australian exporters, including farmers and food and beverage producers, who would gain an advantage through preferential access to the UAE and connected markets for premium food and agricultural products. Other areas that would benefit include exporters of automotive parts, red meat, nickel, coal, and legumes, and First Nations businesses such as those exporting bush foods, bush skincare and fashion.
2.6Alongside the estimated annual A$678 million in increased exports resulting from tariff removal, CEPA would ensure Australian service providers would have access to over 120 sectors and subsectors of the UAE services market. Sectors that would benefit from this commitment from the UAE include professional services (such as legal, medical, management consulting and services incidental to manufacturing), distribution, environmental, education, health and financial services.
2.7Australian service providers would be given greater certainty to operate in the UAE through rules that address restrictions and discrimination when accessing the UAE services market, and the removal of domestic regulation barriers that have a negative impact on two-way trade and investment in services. These changes include ‘addressing licensing requirements and procedures, qualification requirements and procedures, and technical standards affecting trade in services’.
2.8CEPA intends to facilitate two-way investment between the Parties in sectors such as green and renewable energy, data centres and artificial intelligence projects, food and agriculture, minerals, and infrastructure development. These potential investment areas align with Australia’s transition to clean energy and net-zero ambitions.
2.9Australian businesses, workers and consumers would benefit from CEPA’s streamlining of digital trade as well as digital governance and protections. The agreement would increase clarity on intellectual property for Australian businesses and innovators and better protect Australia’s health and pharmaceuticals systems. CEPA’s guaranteed access to the UAE’s government procurement market would also benefit Australian small and medium-sized enterprises (SMEs).
2.10CEPA is designed to provide pathways to promote ‘shared values on trade and sustainable development, environmental protection, labour standards, human rights, and gender issues in line with Australia’s objectives in these areas’. This is reflected in the agreement’s dedicated chapters on each of these areas that recognise related commitments made by Australia to other international agreements. CEPA also includes commitments to the improvement of animal welfare and cooperation on First Nations trade and investment.
Obligations
2.11CEPA is comprised of 26 chapters and associated annexes, appendices, footnotes, side letters, as well as a standalone investment agreement (see Chapter 3 of this report) and five non-binding investment memorandums of understanding. Chapters 1 to 8 are common elements of Australia’s free trade agreements (FTAs).
2.12Chapter 1 confirms that the Parties affirm their existing rights and obligations with respect to each other under other international agreements to which they are also a party. Also included in the chapter are common definitions for terms used across CEPA.
2.13Chapter 2 establishes the basic rules governing trade in goods between the Parties and are consistent with Australia’s commitments under other international agreements. The chapter also includes provisions relating to the Parties’ tariff commitments and on non-tariff measures.These commitments reduce or eliminate preferential tariffs on originating goods without affecting excise equivalent duties.
2.14Chapter 3 specifies the criteria used to determine whether goods traded between the Parties are eligible for preferential treatment. The chapter outlines the procedures for claiming preferential tariff treatment and the processes available to each Party’s customs authorities to verify such claims.
2.15Chapter 4 enhances ‘the transparency, efficiency, predictability and timeliness of customs procedures to facilitate trade, provide certainty through the supply chain and reduce costs’. This builds on commitments under the World Trade Organization’s (WTO) Agreement on Trade Facilitation and allows Parties to minimise the administrative burdens of customs processes. The enhancements to the CEPA also further encourages cooperation between customs authorities and greater transparency and fairness to traders.
2.16Chapter 5 requires Parties to notify the other of anti-dumping investigations and safeguard investigations. The same chapter affirms Australia’s rights and obligations under the WTO’s Agreement on Trade Facilitation and General Agreement on Tariffs and Trade.
2.17Chapter 6 affirms the Parties’ rights and obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). Each Party’s SPS regime is preserved while providing for acceptance of equivalence and recognition of regional conditions. Transparency and cooperation is strengthened through the chapter’s trade facilitative provisions.
2.18Chapter 7 includes commitments for the Parties to promote sustainable agriculture and food systems. These commitments align with explicit principles contained in the treaty and recognise that:
…sustainability approaches must be tailored according to each Party’s circumstances, rules-based and market-oriented trade in supporting global food security the role of rules-based and market-oriented trade in supporting global food security, and the importance of science-and evidence based metrics.
2.19Chapter 8 ensures technical barriers to trade are non-discriminatory and do not create unnecessary obstacles to bilateral trade while retaining the ability for each Party to take measures to fulfil legitimate objectives. This builds upon rights and obligations established by the WTO Agreement on Technical Barriers to Trade and includes strengthened transparency, information exchange and cooperation provisions.
2.20Chapter 9 establishes rules relating to the supply of services between Parties, including obligations to provide access to foreign service suppliers, to treat local and foreign suppliers equally, and to treat foreign suppliers at least as well as suppliers of any third parties. Australia has made these commitments in all sectors (except where specified in its schedule) while the UAE has made these commitments in specific sectors.
2.21Chapter 9 further includes ‘local presence, domestic regulation, denial of benefits, payments and transfers, recognition, transparency, monopolies and exclusive service suppliers, business practices and safeguard provisions’ that are broadly in line with Australia’s existing FTAs. Also in line with Australia’s FTAs are two annexes that concern financial and telecommunications services. Provisions in this chapter are subject to the state-to-state dispute settlement detailed in Chapter 25 except for any measures, decisions or requirements under Australia’s Foreign Investment Framework.
2.22Chapter 10 creates visa-related commitments for both Parties, with Australia’s commitments providing access to UAE citizens in the following categories:
- business visitors for up to three months, or six to 12 months for service sellers;
- installers and servicers for up to three months;
- intra-corporate transferees, including executives or senior managers;
- specialists for temporary stay up to four years, with the possibility of further stay;
- independent executives for up to two years; and
- contractual service suppliers for up to 12 months.
- Right of entry, stay, and work will also be provided by Australia to the spouses and dependants of intra-corporate transferees, independent executives and contractual service suppliers who have been granted entry for 12 months or longer. Chapter 10 does not apply to natural persons attempting to access the employment market nor to those seeking citizenship, nationality, residence or employment on a permanent basis.
- Chapter 11 facilitates two-way investment between the Parties through prioritising sectors of mutual interest, including the transition to net-zero emissions, and provisions that promote engagement with First Nations-owned businesses. Chapter 3 of this report details the related Investment Agreement that has been signed by both Parties.
- Chapter 12 of CEPA creates obligations intending to improve and streamline digital trade by:
- reducing barriers to the cross-border flow of data while still retaining each Party’s ability to regulate for legitimate public policy objectives;
- protecting sensitive business information through the protection of source code and ICT products using cryptography;
- creating provisions for the acceptance of electronic trade documents, e-signatures, e-payments and e-invoicing;
- governing personal information and consumer protections as well as limiting unsolicited commercial electronic messages;
- making commitments on open internet access, open government data, online safety and security and sharing experiences in digital government; and
- facilitating knowledge sharing on digital trade standards, digital identities, data innovation, digital inclusion and cyber security.
- Chapter 13 obliges Parties to maintain competition laws and regulations which prohibit anti-competitive agreements and address mergers with substantial anti-competitive effects. The chapter also includes commitments on maintaining consumer protection laws as well as transparency, procedural fairness and non- discrimination within each Party’s competition landscape.
- Chapter 14 affirms the rights and obligations of each Party regarding intellectual property that have been established by other multilateral agreements. The chapter encourages the balanced protection and enforcement of intellectual property rights while promoting innovation and preserving the ability for Parties to regulate and pursue their public policy interests.
- Chapter 15 contains provisions which are in line with the existing WTO Agreement on Government Procurement obligations. Chapter 16 facilitates cooperation between the Parties on issues affecting SMEs through provisions on information sharing and cooperation.
- Chapter 17 contains provisions to facilitate the exchange of information on best practices, capacity building and acknowledgement of areas of interest for First Nations or Indigenous businesses and peoples. Chapter 18 commits Parties to work together to address trade-related environmental challenges such as climate change, promoting the circular economy, reducing pollution, improving air quality, and preventing overfishing and illegal wildlife trade.
- Chapter 19 commits Parties to cooperating on policies and initiatives to advance women’s economic empowerment in trade and investment. This is accompanied by recognition of related international instruments, such as the Convention on the Elimination of All Forms of Discrimination against Women.
- Chapter 20 affirms the Parties’ commitments as International Labour Organization (ILO) members to respect and advance labour rights. This is partly facilitated through the chapter’s creation of a Dialogue on Labour which intends to advance labour rights through engaging with stakeholders and promoting cooperation on labour matters of mutual interest.
- Chapter 21 supports the effective implementation and utilisation of CEPA by highlighting areas of potential initial cooperation such as supporting voluntary engagement between private sector bodies and stating shared high-level understandings on cooperation in areas such as animal welfare.
- Chapter 22 commits Parties to minimum standards of transparency through provisions that promote greater transparency in government decision-making and in the publication of their laws and regulations. The chapter also affirms the Parties’ shared commitment to adopting or maintaining and enforcing appropriate measures to prevent and combat corruption in matters affecting international trade or investment.
- Chapter 23 provides administrative and institutional procedures to facilitate the effective implementation of CEPA. Chapter 24 establishes expectations on matters such as essential security, taxation measures and balance of payments, and creates obligations regarding the maintenance of confidential information and the disclosure of information.
- Chapter 25 contains the rules and procedures for the resolution of any disputes arising from CEPA. These are based on the WTO’s dispute resolution rules and procedures and apply to all CEPA obligations except for those in Chapters 3 to 7, Chapter 11, Chapter 13, Chapters 15 to 21 and article 22.4 of Chapter 22. Also included in Chapter 25 are annexes that establish the rules of procedure to govern the dispute settlement process and code of conduct duties that apply to panellists and others engaged in any dispute settlement proceedings.
- Chapter 26 contains provisions governing the administration of CEPA, including the conditions for the treaty to enter into force and the process for general review by the Parties. Also included are the processes by which Parties can amend or terminate CEPA.
Consultation
2.37From March 2022, prior to CEPA negotiations commencing, the Department of Foreign Affairs and Trade (DFAT) invited the public to make submissions on the impact of CEPA. 45 formal written submissions were received and DFAT continued to accept written submissions throughout the negotiation process.
2.38DFAT’s Chief Negotiator also held regular open forums throughout negotiations, providing updates on the status of negotiations to stakeholders both virtually and in-person. DFAT held virtual and in-person consultations with peak bodies, stakeholders, individuals and organisations throughout 2024. Consultation with stakeholders from the agricultural sector is discussed in the Issues section of this chapter.
2.39Representatives from First Nations’ peak bodies, First Nations chambers of commerce, and First Nations businesses from across States and Territories were engaged by DFAT to discuss trade negotiations. Updates and calls for submissions were also published through the First Nations Trade and Investment monthly bulletin and First Nations business peak bodies were among those invited to briefings with peak bodies.
2.40DFAT consulted across government throughout negotiations, including with Treasury, Department of Agriculture, Forestry and Fisheries, Department of Finance, Attorney General’s Department, IP Australia, Department of Health, Department of Industry Science and Resources, Austrade and Department of Home Affairs. Updates were also provided to State and Territory governments after each negotiation round.
Implementation
2.41CEPA will enter into force 60 days after the date on which the Parties exchange written notification through diplomatic channels, confirming that they have completed their respective domestic requirements, or on any other mutually agreed date. To give effect to commitments in CEPA, Australia will need to amend legislation relating to customs, foreign acquisitions and takeovers, and labour market testing. Identified legislation requiring amendment is listed below:
- Customs Tariff Act 1995
- Customs (International Obligations) Regulation 2015
- Customs Act 1901
- Customs (UAE Rules of Origin) Regulation (to be created)
- Foreign Acquisitions and Takeovers Regulations 2015
- Migration (International trade obligations relating to labour market testing) Determination (LIN 21/075) 2021.
- The main cost associated with CEPA is a reduction in tariff revenue from UAE imports, estimated to be A$16 million in 2025-26 and increasing to A$23 million per year by 2029-30, when all tariff reductions are fully implemented. No new funding is required.
Withdrawal
2.43CEPA remains in force unless terminated by one Party by giving the other Party notice in writing through diplomatic channels. Termination then takes effect six months after the date of notification, or on such date as the Parties may agree.
Future treaty action
2.44CEPA can be amended through written agreement of the Parties. Amendments shall enter into force 60 days after the date on which the Parties exchange written notifications confirming that they have completed the domestic requirements necessary for the entry into force of the amendments, or on any other agreed date.
Issues
Animal welfare consultation
2.45Members of the agriculture industry voiced their concerns with DFAT’s consultation process throughout CEPA negotiations, particularly in relation to the commitment to improve animal welfare protection included in Chapter 21. While stating that they did not take issue with the commitment, the National Farmers’ Federation said they had concerns with the lack of transparency throughout negotiations.
2.46The Australian Livestock Exporters’ Council (ALEC) shared these concerns and stated that while they had been consulted throughout CEPA negotiations, ALEC had not been directly consulted on the inclusion of animal welfare commitments within the Agreement. Australian Dairy Farmers said that it was a ‘major concern’ that the technical details relating to animal welfare were not brought forward to the agricultural industry prior to being incorporated into CEPA. When questioned about consultation on animal welfare, DFAT said that the issue had been part of the consultations with agricultural stakeholders.
2.47ALEC said that the inclusion of commitments to technical matters (such as animal welfare) in trade agreements can create barriers in ongoing and future trade negotiations due to disagreements between parties. The Australian Meat Industry Council (AMIC) echoed these concerns and stated that they were not concerned with the commitments made in CEPA, but were cautious that it would lead down a path of more ‘binding and prescriptive’ language being used in relation to similar matters in future trade agreements.
2.48DFAT said that it was not unusual for there to be a reference to animal welfare within Australian FTAs and pointed to the Australia-United Kingdom Free Trade Agreement as one example. DFAT described the Article within CEPA as an ‘enabling-of-dialogue provision’ that endeavoured to improve animal welfare where there was scope to do so. It was emphasised that the rights of Parties to enact their own animal welfare policy was not restricted by the agreement and that the commitment’s intention was to ‘build on existing cooperation and information exchange in the field of animal welfare’.
Benefits of CEPA
2.49Evidence describing the benefits that CEPA would provide to a wide range of Australian industries was presented to the Committee. Witnesses from the agriculture industry said that CEPA would ‘deliver significant economic benefit to Australian agriculture’ and welcomed the removal of the five per cent tariff on products such as dairy and red meat, stating that it would improve Australia’s cost competitiveness in the UAE. DFAT said:
The resulting tariff savings from the agreement to Australian exporters will be in the vicinity of $135 million in the first year, rising to $160 million when the agreement is fully implemented.
2.50The opportunity for future growth within the region and further diversification of Australia’s trade network was referenced. AMIC said that CEPA provided a framework for future trade agreements within the Middle East region and encouraged a similar agreement with the Gulf Cooperation Council, a sentiment that was repeated by witnesses from the agriculture industry.
2.51The Australian Industry Group cited CEPA’s country of origin scheme and streamlining of digital trade as measures that would reduce administrative burdens and would enhance economic collaboration. Mining and horticulture were highlighted as sectors that would benefit from ratification, as would service providers such as those within financial services and telecommunications industries.
2.52DFAT stated that CEPA would facilitate UAE investment into Australian priority sectors such as projects that support Australia's clean energy transition and Future Made in Australia objectives. The Council on Investment, investment protections and non-discrimination provisions were cited as factors in the agreement that would increase two-way investment and tap into the potential found within the UAE’s sovereign wealth funds.
Labour and human rights
2.53Representatives of labour unions and fair-trade investment opposed the ratification of CEPA, due to concerns over the UAE’s history with poor labour rights and breaches of human rights. For example, the Australian Council of Trade Unions (ACTU) stated:
We strongly oppose the Australian government pursuing a bilateral trade agreement with the United Arab Emirates, due to their consistent and serious violations of fundamental labour rights.
2.54The ACTU went on to detail the employment climate in the UAE to support their reasons for opposing CEPA:
…trade unions, political organisations and political parties are illegal. Workers are prohibited from collectively organising, bargaining or striking. Migrant workers, who make up 80 per cent of the population and 90 per cent of the UAE's workforce, are effectively modern-day slaves under the kafala system.
2.55Recognising there have been some recent changes to labour laws in the UAE, the Australian Fair Trade and Investment Network (AFTINET) also expressed concern that rights for workers are not adequate:
…despite some recent changes to labour laws, the UAE hasn't ratified basic conventions on freedom of association and the right to collective bargaining, and 90 per cent of its workforce consist of temporary migrant workers with no effective workplace rights, which has been defined as modern slavery.
2.56In their submission to the DFAT’s stakeholder consultation process into CEPA, the ACTU wrote that these labour law changes provided the right for migrant workers to file labour related grievances with the Human Resources Ministry. However, they also noted a recent report that found workers were still fearful of being deported if they expressed a work-related grievance.
2.57This claim was supported by AFTINET who stated:
Ninety per cent of the UAE workforce really have no rights at all, because they're temporary migrant workers, who can be deported if they raise any issues about their working conditions.
2.58Labour union and fair-trade investment representatives also highlighted concerns over human rights abuses in the UAE. The ACTU added that ratification of this agreement sends the wrong signal about doing business with a state that has a history of ‘systemic discrimination against women, the criminalisation of homosexuality and transgender expression and the criminalisation of political dissent’. The ACTU stated:
The Australian union movement is deeply concerned that ratifying a trade agreement with the UAE sends the signal of Australia legitimising and incentivising continued violation of labour and human rights.
2.59As stated previously, Chapter 20 of CEPA affirms the Parties’ commitments as ILO members to respect and advance labour rights, facilitated through the Dialogue on Labour which intends to advance labour rights through engaging with stakeholders and promoting cooperation on labour matters of mutual interest.
2.60These commitments are non-binding and serve to encourage dialogue between the two Parties. This caused some concern for the ACTU who stated:
Whilst we appreciate the Australian government has pursued labour provisions in this agreement, it should be noted that these are unenforceable. Unions have been clear throughout, however, that even the most carefully worded labour chapter will not resolve the core problem here.
2.61AFTINET shared this view:
…although there are short chapters in the agreement dealing with labour rights, women's rights, religious rights and environmental standards, which do refer to some UN [United Nations] and ILO convention, the language is not binding and does not commit the parties to implement them. Nor does the state-to-state dispute process in the agreement apply to those chapters. The exemption from the dispute process means that there's no way of enforcing even these weak commitments, so there's no obligation on either party to take any action to implement these chapters.
2.62The ACTU questioned the objective of the chapter and whether dialogue proposed within could be genuine in an environment where independent unions are not even allowed to operate.
2.63However, DFAT told the Committee that including this chapter was a carefully negotiated outcome in what they see as a positive step toward further dialogue to improve labour rights and human rights in the UAE. They explained the justification for non-binding commitments:
Certainly, for the UAE, there were a number of these chapters where they were very open to the content and the discussion, but they were not persuaded that these needed to be in an FTA. They were willing to take the journey with us on how we do FTAs, but it was a very carefully negotiated outcome. Part of the negotiations was a willingness to take on the issue and put it in what is a legally binding treaty but not to have that subject to dispute settlement.
2.64DFAT went on to identify the benefits of negotiating this treaty with the UAE and achieving an outcome where dialogue around labour rights and human rights are embedded into the agreement. DFAT said:
…a provision enables dialogue and conversation, and that conversation leads to action, outcome and partnership building, the sorts of things we want to see.
2.65DFAT also noted that the UAE is undertaking a process of reform in their practices around labour rights and human rights. They detailed the ongoing engagement DFAT are having with the UAE, including seeking updates on how the UAE’s recently established National Human Rights Institution is functioning, and maintaining ongoing dialogue on the UAE on their recent efforts to strengthen labour rights and their efforts to dismantle the problematic kafala system of migrant employment.
Committee comment
2.66The benefits that CEPA will provide to Australia are understood by the Committee. Australian farmers, miners and manufacturers will be among those who benefit from the A$678 million in increased exports resulting from CEPA’s removal of tariffs. The increase in two-way investment benefits both Parties and will ensure that Australia can continue progressing projects within our priority sectors.
2.67The Committee also recognises that CEPA is a landmark agreement for Australia. It is the first Australian FTA with a Middle Eastern nation and includes chapters that promote sustainable agriculture and First Nations businesses, a first for an Australian FTA. The Committee perceives CEPA as a modern agreement that facilitates dialogue on a variety of priority issues for both Australia and the UAE.
2.68Evidence regarding industry consultation throughout CEPA negotiations highlights the importance of ongoing and transparent communication throughout these processes. The Committee encourages all parties to maintain a formalised dialogue with each other to represent their views and continue collaborating to maintain Australia’s world-class animal welfare standards which Australia is already maintaining.
2.69The Committee notes concerns raised around labour rights and human rights in the UAE but is encouraged by action the UAE has taken so far. Further, the Committee notes the importance of maintaining an ongoing and productive dialogue on these matters between the two Parties, which the Committee believes is encouraged through CEPA.
2.70The Committee supports the Comprehensive Economic Partnership Agreement between Australia and the United Arab Emirates and recommends that binding treaty action be taken.