The European Union (EU) and the United Arab Emirates (UAE) have agreed to initiate free trade negotiations, European Commission President Ursula von der Leyen announced on Thursday.

“This marks a positive step forward in EU-UAE relations and, alongside broader Strategic Partnership Agreements, can serve as a catalyst for stronger ties between the EU and the Gulf Cooperation Council (GCC),” the European Commission said in a statement.

European Commissioner for Trade and Economic Security, Maros Sefcovic, is expected to visit the UAE soon to move the talks forward, Xinhua news agency reported.

The negotiations will focus on liberalizing trade in goods, services, and investment. They will also enhance cooperation in strategic sectors such as renewable energy, green hydrogen, and critical raw materials.

The move comes as the EU seeks to diversify its trade relationships following US President Donald Trump’s recent announcement of a 90-day pause on new “reciprocal” tariffs, including a 20 per cent levy on EU imports.

Von der Leyen expressed optimism, emphasizing that both parties are committed to progressing “swiftly and ambitiously.”

The EU is currently the UAE’s second-largest trade partner, contributing $67.6 billion in non-oil trade in 2024. This accounts for 8.3 per cent of the UAE’s total non-oil foreign trade, according to official UAE data.