With or Without US: UAE-EU Reaffirm Commitment to IMEC

Trump-induced shocks are accelerating economic integration, establishing a Europe-Asia trade corridor even if independent of Washington.

Image: Dubai 103.8

On 10 April, Emirati President Sheikh Mohamed bin Zayed Al Nahyan and European Commission President Ursula von der Leyen announced the beginning of long-sought negotiations for an EU-UAE Free Trade Agreement (FTA). This economic cooperation peak follows growing relations that have seen Abu Dhabi become the largest investor in the bloc and its second largest trading partner. It appears US President Trump's recent tariff manoeuvres have served as a speedrun for countries like the UAE’s diversification ambitions. Should they bear fruit, the negotiations could pave the way for a comprehensive FTA with the Gulf Cooperation Council (GCC), which in turn could lead to a China-GCC agreement: a snowballing of historical developments that would see the crystallisation of a Europe-Asia trade corridor even if independent of Washington unilateralist tendencies.

UAE Doubles Down on IMEC with $40 Billion Italy Investment

UAE: Paving its own path?

For nearly three decades, a comprehensive EU-GCC FTA has been on and off the table, stalled by issues regarding human rights clauses, the EU’s perceived ‘inflexibility’, and the Gulf states’ insistence on maintaining export tariffs. These tariffs were on key goods like petrochemicals and aluminium, and reportedly served as the main point of contention that suspended talks in 2009.

Frustrated by the impasse, it appears that Abu Dhabi has taken the issue of securing the European market into its own hands, diverging from the GCC’s collective path and emerging as a dominant player on the continent, both economically and politically. With over $50 billion invested in sectors such as renewable energy and logistics since 2020, and $67.6 billion in non-oil trade in 2024, the UAE now stands as the largest Gulf investor across Europe and in key countries such as Cyprus — a vital hub for intra-regional trade that has attracted nearly half a billion dollars in GCC foreign direct investment. Moreover, its diplomatic efforts vis-à-vis the Russia-Ukraine war demonstrate a growing assertiveness, signalling a long-term commitment to shaping Europe’s political landscape.