UAE-Azerbaijan CEPA enters into force: What trade deal means for UAE businesses

Dubai: The UAE’s trade relationship with Azerbaijan has entered a new phase after the Comprehensive Economic Partnership Agreement (CEPA) between the two countries officially came into force on Tuesday.

This opens the door to lower tariffs, easier market access and fresh investment opportunities for businesses in the emirates, the UAE Ministry of Foreign Trade (MoFT) said in a statement.

For UAE exporters, investors and entrepreneurs, the deal is expected to make it easier to do business with Azerbaijan, a strategically located market linking the Middle East, Central Asia and Europe.

The agreement, according to MoFT, is designed to accelerate trade flows, remove or reduce tariffs on a wide range of goods and services, and strengthen private-sector partnerships in sectors including logistics, renewable energy and advanced manufacturing.

The CEPA comes as trade between the two countries continues to rise sharply. Non-oil trade between the UAE and Azerbaijan has grown by 31.4 per cent over the past two years, exceeding $2.2 billion in 2025, reflecting growing commercial ties between the two nations.

Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of Foreign Trade, described the agreement as a landmark moment in bilateral relations.

“The UAE-Azerbaijan CEPA marks a transformative moment in bilateral ties, and promises to enhance trade flows, unlock new investment opportunities, and foster increased private sector collaboration across key sectors, particularly in logistics, renewable energy, and advanced manufacturing,” he said.

He added that Azerbaijan’s geographical position makes it especially valuable to the UAE’s long-term trade ambitions.

“Azerbaijan is located at a crucial juncture in North-South trade and by integrating our economic visions, we can ensure increased resilience and sustainable growth in a rapidly changing global market,” Al Zeyoudi said.

Largest Arab trade partner

Azerbaijan is already the UAE’s largest Arab trading partner in the Caucasus nation, accounting for 40 per cent of its trade with the wider MENA region. The UAE is also the biggest Arab investor in Azerbaijan, with investments exceeding $1 billion.

The agreement is Azerbaijan’s first trade pact to include a dedicated services chapter, creating new openings in finance, consulting, construction and professional services — areas where many UAE firms are actively expanding overseas.

The Azerbaijan agreement is part of the UAE’s wider CEPA programme, under which the country is building a network of trade partnerships aimed at diversifying the economy, raising total trade to Dh3.67 trillion ($1 trillion) by 2031, and doubling national economic output over the same period.