(Bloomberg) — Turkey and the United Arab Emirates said they would work on better trade ties and explore defense industry cooperation as President Recep Tayyip Erdogan visited the Gulf state on Monday, further putting aside a longtime regional rivalry.
Erdogan met with UAE de facto ruler Sheikh Mohammed Bin Zayed Al Nahyan in Abu Dhabi, the second meeting in three months, after years of hostility between the Middle East nations over the role of Islamist groups in the 2011 Arab Spring uprisings.
The sides signed 13 cooperation deals and will explore developing defense industry cooperation, Turkey’s state-run Anadolu Agency said, without giving details.
UAE Bets on Old Foe Turkey as its New Trade Link to the World
The UAE, a small but influential oil-and-business powerhouse, signed a $4.9 billion currency swap with Turkey in January, and has outlined plans for a $10 billion fund to support investments as it seeks to at least double bilateral trade.
Non-oil trade between the two countries reached $13.7 billion in 2021, a 54% increase on 2020 and 86% increase on 2019, according to the UAE Economy Ministry. The UAE is confident that non-oil bilateral trade will exceed $30 billion within five years, the UAE’s minister of state for foreign trade Thani Al Zeyoudi said.
Discussions on investments are now happening at the business-to-business level and sectors include food security, medical services, logistics, industry and e-commerce, he added.
Catalyzing the recent thaw in relations is financial tumult in Turkey that’s sent Erdogan’s popularity plunging, and the growing challenge from Saudi Arabia to the UAE’s standing as a global business and financial hub.
The UAE has said it wants to benefit from Turkey’s logistical ties with the rest of the world, its investments in the industrial sector and its skilled labor.
Turkey is battling inflation of almost 50%, and a lira that lost as much as half its value against the dollar before the government intervened at the end of December to stem the currency’s decline. Fitch Ratings cut Turkey’s sovereign credit rating further into junk over the weekend.
UAE to Grow Asia, Africa Trade, Seek $150 Billion Investment
The UAE is working on comprehensive economic partnership agreements with several fast-growing economies as it seeks to cement its position as a global trade hub. It has started talks with India, Indonesia, Israel and Georgia, and plans to add the Philippines.
(Specifies agreements in lede, adds details on trade, sectors for investment)
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