Overview

The United Arab Emirates (UAE) is situated in the southeast of the Arabian Peninsula, bordering Oman and Saudi Arabia. Prior to independence, the seven Emirates were part of a British protectorate called the Trucial States. In December 1971, the UAE became a federation of six emirates - Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, and Fujairah, while the seventh emirate, Ras Al Khaimah, joined the federation in 1972. The capital city is Abu Dhabi, located in the largest and wealthiest of the seven emirates.

Since its Federation in 1971, the UAE has developed rapidly and is now noted for its modern infrastructure, international events and status as a trade and transport hub.

The UAE hosted the COP28 international climate summit in Dubai in 2023 and hosted the WTO's 13th Ministerial Conference (MC13) in February 2024.

Political overview

The President of the UAE and ruler of Abu Dhabi is His Highness (HH) Sheikh Mohammed bin Zayed Al Nahyan. The Ruler of Dubai, HH Sheikh Mohammed bin Rashid Al Maktoum, is the Vice-President, Prime Minister, and Defence Minister.

The UAE's federal structure includes a Supreme Council (comprising the Rulers of each Emirate), a Council of Ministers and Federal National Council. Each Emirate is governed by its own Ruler, with its own local government, courts and police forces.

The Federal National Council comprises 40 members, half of which are appointed and half elected. Elections were last held in October 2023 and included the requirement for 50 per cent of members to be women. The Federal National Council has an advisory role and is a forum in which concerns of Emiratis are raised.

The UAE is a member of the Gulf Cooperation Council (GCC), the Arab League, the Organization of Islamic Cooperation (OIC), the United Nations, the Organization of the Petroleum Exporting Countries (OPEC), the Non-Aligned Movement and the World Trade Organization (WTO). The International Renewable Energy Agency, established in 2009, has its headquarters in Abu Dhabi.

On 15 September 2020, the UAE and Israel signed the Abraham Accords in Washington, DC, establishing diplomatic relations between the two countries.

Bilateral relations

Bilateral relations between Australia and the UAE are friendly, multi-faceted and growing rapidly. They are underpinned by extensive trade relations, and the UAE is Australia's largest trade and investment partner in the Middle East. The two countries enjoy good defence, aviation, security and law enforcement cooperation, the latter underpinned by agreements on mutual legal assistance in criminal law matters and extradition.

Australia was among 192 participating countries at Expo 2020 Dubai, which ran from 1 October 2021 to 31 March 2022. Expo 2020 provided a key platform for Australian companies to reengage with traditional partners and progress market diversification strategies, including the growth of exports into the Middle East and South Asia.

The Australian Ambassador to the UAE is based at the Australian Embassy in Abu Dhabi. Australia also has a Consulate-General in Dubai, led by the Consul General and Trade Commissioner. State government offices representing New South Wales, Queensland, Western Australia, and Victoria are also based in the UAE.

People to people links

People-to-people contacts have expanded rapidly on the back of the strong growth of direct air links. Prior to the COVID-19 pandemic restrictions, over 100 Emirates and Etihad flights per week operated between the UAE and Australia. An estimated 15,000 Australians live and work in the UAE.

At the start of 2020, in response the severe Australian bushfire season, the UAE donated fire trucks and generators to several affected communities. On 16 January 2020, the Burj Khalifa, the world's tallest building which is located in Dubai, was lit up with the phrase '#mateshelpmates' as a sign of the UAE's support for bushfire response.

Economic overview

The UAE is the Middle East's third largest economy, and one of the wealthiest countries in the region on a per capita basis. Its GDP in 2023 was estimated at US$509 billion.

The UAE has six per cent of the world's oil reserves and the seventh largest proven natural gas reserves. Petroleum exports were US$94.7 billion in 2023. In the medium term, oil and gas (which account for over two-thirds of exports and the bulk of government revenue) will continue to underpin the UAE's economy. However, significant steps towards economic diversification have already been taken, with approximately 70 per cent of GDP now generated by sectors other than oil and gas. To celebrate 50 years of nationhood in 2021, the UAE launched 50 new economic initiatives to boost the country's competitiveness and attract US$150 billion in foreign direct investment over the next nine years.

Abu Dhabi, which has the vast majority of oil and gas reserves in the UAE, has made significant investments in establishing aerospace, nuclear power, defence, information technology (micro-processing), petrochemical and clean-tech industries – the latter most prominently represented by the multibillion-dollar initiative of Masdar City, a zero-carbon city outside Abu Dhabi. Abu Dhabi is also investing heavily in educational institutions, and cultural and sporting attractions such as the Formula One racing track, Ferrari theme park, and the Louvre Abu Dhabi to diversify the economy away from oil and encourage tourism.

Dubai has also diversified into the exhibitions, events, ICT, re-export and financial sectors. Taking advantage of its position near the head of the Gulf, it has consolidated its historical reputation as a regional entrepôt. Dubai has developed luxury hotels, large port facilities (including Jebel Ali) and a range of free trade zones to attract both manufacturing and services industries.

The UAE population of 9.97 million (2023) depends substantially on its expatriate workforce, which made up about 88 per cent of the population. The UAE is also opening up utilities to greater private sector involvement. Several free trade zones across the country attract foreign investors, by offering full ownership and zero taxes.

Trade and Investment

On 13 December 2023 Australia and the UAE announced the commencement of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) – a bilateral free trade agreement – that will lay the groundwork for closer economic ties.

The conclusion of negotiations on the CEPA were announced on 17 September 2024 and Australia and the UAE are now both working to formalise the legal treaty text in preparation for signing later this year.

The UAE is Australia's largest trade and investment partner in the Middle East. With $9.43 billion in two-way goods and services trade in 2023 (over $10 billion pre-COVID), the UAE is Australia's 21st largest trading partner globally. Goods and services exports to the UAE were worth $5.2 billion in 2023 and were dominated by alumina, meat and oil seeds. Australian goods and services imports from the UAE were worth $4.7 billion in 2023 and mainly consisted of petroleum products and urea.

Services trade is an increasingly important component of the commercial relationship, including construction, financial and professional services, tourism and education. Education is seen as an area of potential growth, with several Australian institutions active in the UAE market, including: Wollongong University, which in 1993 was the first private university to establish a campus in Dubai; Murdoch University, which opened in Dubai in 2007; Curtin University, which opened in Dubai in 2018; the Australian International School Sharjah; the Victorian International School Sharjah; and a number of Australian institutions with partnerships with local institutions to deliver the Australian curriculum in-country.

Australia's commercial profile in the UAE is significant, with UAE-based Australian companies numbering over 300. Australian companies, institutions and capabilities are working in a range of industries, including steel trading, construction and financial services, banking services, agricultural supplies and services, industrial minerals, dairy products, marine manufacturing, education and training services, sports and recreation, health services, livestock, oil field supplies, courier and freight services. Many companies use Dubai as a regional base, in view of its transport, financial and communications infrastructure. UAE entities hold significant investments in Australia, including in the agribusiness, tourism, health and aged care and resources sectors.

In 2023, UAE investment in Australia was estimated at close to $12.7 billion according to ABS data. The Abu Dhabi Investment Authority (ADIA), the world's fourth largest sovereign wealth fund, has invested in ports, the TransGrid electricity network and the Queensland Motorway project. Other UAE sovereign wealth funds also have assets and are examining other investment opportunities in Australia. In May 2024, the Mubadala Investment Company, another of Abu Dhabi’s sovereign wealth funds, announced the largest investment ever made in the Australian fertiliser industry with a joint investment of A$6.4 billion with Global Infrastructure Partners in the Perdaman Western Australia Urea project.

Recent high-level visits

• September 2024: HE Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade visited Australia.
• April 2024: the Hon Richard Marles MP, Deputy Prime Minister and Minister for Defence visited the UAE.
• February 2024: Senator the Hon Don Farrell, Minister for Trade and Tourism, and Senator the Hon Tim Ayres, Assistant Minister for Trade and Manufacturing, visited the UAE for WTO MC13.
• January 2024; Senator the Hon. Penny Wong, Minister for Foreign Affairs, visited the UAE.
• December 2023: the Hon Chris Bowen MP, Minister for Climate Change and Energy; Senator the Hon Jenny McAllister, the Assistant Minister for Climate Change and Energy; and the Hon Ged Kearney MP, Assistant Minister for Health and Aged Care visited the UAE for COP 28.
• November 2023: the Hon Richard Marles MP, Deputy Prime Minister and Minister for Defence visited the UAE.
• June 2023: the Hon Tim Watts MP, Assistant Minister for Foreign Affairs visited the UAE.
• January 2023: the Hon Chris Bowen MP, Minister for Climate Change and Energy visited the UAE.
• May 2022: HE General the Hon David Hurley, the Governor-General visited the UAE.