The UAE and Japan… an economic partnership that spans more than half a century

• Kishida’s visit to the country is his first official visit after the launch of the comprehensive partnership agreement between the two countries last September.
• The visit is an opportunity to enhance the economic relationship to a broader and more comprehensive level, especially since the two countries have a common interest in continuing to expand trade and investment between them.
• The areas of cooperation between the two countries focus on many basic sectors, and the two countries seek to strengthen and diversify them at the economic level in particular, including sectors such as aviation, tourism, space, culture, education, medical services, and the environment.

“The strategic relationship between the UAE and Japan is well-established, and they set a wonderful example of how to employ economic diplomacy for the benefit of their people,” Jamal bin Saif Al-Jarwan, Secretary-General of the Emirates Council for Investors Abroad, told Sky News Arabia.

For his part, the consultant and economist, Dr. Kamal Amin Al-Wasal, told “Sky News Arabia Economy” that “Japan seeks to strengthen its economic presence in the region in light of the growing international competition, and with the growing presence of economic powers that have strengthened their presence on the international scene and in the region, such as China and India.” .

Hence, the visit may be a new beginning for economic relations that are more solid and comprehensive than simply enhancing trade exchange between the two countries.

• During the past ten years, the total volume of non-oil trade between the two countries amounted to $142.7 billion.
• The volume of non-oil trade exchanges between the two countries increased by 10 percent over the past year 2022 to $14.7 billion.
• UAE imports from Japan increased to $12 billion in 2022.
• UAE non-oil exports to Japan will reach $1.78 billion in 2022.
• Re-exports from the UAE to Japan also increased over the past year by $950 million.
• Total trade exchange in general (including oil) increased by 57.5 percent in 2022, reaching more than $54.4 billion.
• The volume of trade exchange between the UAE and Japan increased to $11.9 billion during the first three months of this year 2023, a growth of 10 percent.
• The UAE’s exports to Japan, which include oil exports, increased during the period from January to March 2023, by 8.2 percent, to reach $9.52 billion, with a growth of 7.6 percent.
• UAE imports from Japan increased by 19.6 percent, to reach $2.45 billion, during the first quarter of 2023.
• UAE exports to Japan increased by 3.3 percent to 3.46 billion dollars during the first four months of this year, and UAE imports from Japan increased by 17.8 percent to 870 million dirhams, during the same period.
• The UAE accounted for 37.8 percent of Japan’s total trade with the Middle East region during the period between January and April 2023, which amounted to about $42.2 billion.

In this context, economist Waddah Al-Taha told Sky News Arabia that the main point in these UAE-Japanese relations stems from a special economic strategy adopted by the UAE, by diversifying strategic economic relations with countries that play an essential and important role in the global economy. , including Japan, with its weight and presence at the international level in general.

Al-Taha indicates that this diversity is also linked to the primary and important role that the UAE plays in the region as a soft power, and also emerges through its strategic relations with many other parties, including Russia, India, Japan and other countries, explaining that this diversity would give the UAE more popularity. In the world, and enhances its position as a suitable place for investments, as evidenced by the fact that investments in the UAE were the highest in 2022 compared to countries in the region in 2022, amounting to $23 billion.

Last September, the UAE and Japan launched the comprehensive strategic partnership agreement between the two countries, which was announced in 2018, during the visit of former Prime Minister Shinzo Abe to the UAE. The agreement aims to:

• Enhancing bilateral relations between the two countries, by encouraging more diplomatic, economic, political and commercial participation and encouraging investment in the two countries.
• The main areas of partnership include cooperation in the political and diplomatic field and strengthening efforts to provide development and humanitarian aid.
• In addition to cooperation in the field of economy, trade, energy and industry by enhancing the business environment for trade and investment in all sectors such as industry, technology, infrastructure, artificial intelligence, health care, small and medium enterprises and other priority areas.
• It also aims to cooperate in the fields of agriculture, environment and climate change, education, science and technology, defense and security, according to the Emirates News Agency.

And Al-Taha indicated, in his interview with “Sky News Arabia Economy”, that “the strategy adopted by the UAE in terms of diversifying economic relations would enhance strategic cooperation with Japan, especially through technological exchange for the benefit of the UAE, and through cooperation in energy sector, and oil exports to Japan.

In the context of the economic cooperation relations between the two countries, the two countries have strategic cooperation in the energy transition, and the bilateral relations between them are based on long-term partnerships in the energy sector in general, joint work to take advantage of the economic opportunities offered by the transformation in the sector, the promotion of industrial cooperation and the expansion of economic and trade relations between the two friendly countries. Among the aspects of this cooperation:

• The two countries cooperate in many fields and current joint initiatives, which include the production of low-emission blue hydrogen and ammonia, to meet the ambitions of the UAE and Japan to benefit from new commercially viable technologies to reduce emissions.
• ADNOC and Mitsui & Co., Ltd. signed a memorandum of cooperation, according to which Mitsui will become a partner, along with Vertiglobe and GS Energy, in the development of the world-class low-carbon blue ammonia production facility within the Chemical Industries Promotion Zone, a joint venture between ADNOC and Mitsui & Co., Ltd. ADNOC and ADQ Holding in Ruwais, Abu Dhabi.
• This project contributes to consolidating the UAE’s leadership in the field of low-carbon fuels by benefiting from the global demand for blue ammonia as a clean hydrogen fuel. The world-class blue ammonia production project is expected to start production in 2025, with a production capacity of about one million tons per year.
• ADNOC also signed a memorandum of understanding with Ineos and Mitsui to conduct a joint feasibility study to explore opportunities for establishing a hydrogen supply chain between the UAE and Japan.
• ADNOC has entered into a joint study agreement with three Japanese companies, INPEX Corporation, JERA, and the Japan National Oil, Gas and Minerals Corporation, to explore the commercial potential for blue ammonia production in the UAE.
• Masdar Company signed a memorandum of understanding with Sumitomo Corporation regarding the development of waste-to-energy projects and opening prospects for cooperation between the two companies in a range of projects, including a facility to treat 390,000 tons of waste annually and generate 25 megawatts of energy.

The economist, Waddah Al-Taha, points out that Tokyo relies on the UAE to secure its strategic reserves, with refineries, tanks and warehouses located in Japan.

Al-Taha added, “This great confidence in the UAE’s policies puts it in a different position compared to other countries. I believe that this confidence is a key factor in strengthening the strategic partnership between the UAE and Japan in this way.”

In an article published by the Emirates News Agency, the Japanese Prime Minister sent a number of important messages regarding his country’s economic relations with the UAE, including:

• The UAE is a strategic partner of Japan, and we are determined to strengthen our relations with it over the next 50 years.
• Steady supplies of oil and gas from the UAE have supported Japan’s economic growth for many years.
• The UAE hosts the largest number of Japanese expatriates in the region, and about 340 Japanese companies.
• Together, we can transform the region into a global supply chain hub for next-generation fuels and mineral resources.
• The UAE is working with great responsibility to ensure global energy security, and is making proactive efforts to address climate change issues.
• Japan will work closely with the UAE for the success of COP 28.
• The UAE is the first country in the Middle East to announce its quest to achieve net zero emissions by 2050.
• Japan has contributed to the UAE’s space exploration efforts for many years.

balance in relationships

An economist expert specializing in economic and administrative consulting, Rida Musallam, points out in exclusive statements to “Economy Sky News Arabia” that the UAE has adopted a unique strategy in the context of diversifying relations, building and maintaining very strong relations with all countries of the world, stressing that the UAE is working to achieve Balance in international relations and its supreme interest, usually as a mediator between countries that adopt different points of view.

Muslim explains that Japan is an ancient country and has a long history of relations with the UAE, and there is a wide keenness to strengthen and develop these relations in the next stage on various sectors and levels.

Japan is considered one of the first countries to recognize the UAE as an independent country on December 3, 1971, as diplomatic relations between the two countries began on May 6, 1972, and the UAE opened its embassy in Tokyo on December 20, 1973, while Japan opened its embassy in Abu Dhabi on April 7, 1974. .

The UAE is the second largest supplier of oil to Japan and an important source of natural gas and aluminum. It is also a safe, stable and reliable source of energy, and plays the role of a strategic partner and collaborator in various fields.

Muslim stresses that the current visit of the Japanese Prime Minister to the UAE is discussing many important files, and reflects the keenness to build alliances in various fields and economic sectors to strengthen relations between the two countries, explaining that what distinguishes relations between the two countries is calm, stability and sustainability over the past decades. , without any tensions or otherwise.

According to the Secretary-General of the Cooperation Council, Jassim Muhammad Al-Budaiwi, the resumption of negotiations comes in implementation of the directives of the Ministerial Council to conclude free trade agreements with the trade partners of the GCC countries, in its session held in June 2022. He stressed that Japan is considered one of the priorities of the Cooperation Council, through which it seeks to strengthen Their strategic, economic, developmental and investment relations.

According to Al-Budaiwi, this agreement would consolidate trade and investment relations between the two sides, and promote a new era of partnership aimed at providing many opportunities for joint growth for the two business communities.