The United Arab Emirates has marked a significant expansion of its economic footprint in Latin America through Comprehensive Economic Partnership Agreements with Chile and Costa Rica. These agreements represent the UAE’s strategic push to diversify trade partnerships beyond its traditional markets and establish itself as a global trade facilitator connecting multiple continents.
Introduction: The UAE’s Latin American Strategy
The UAE launched its Comprehensive Economic Partnership Agreement program in September 2021 as part of its foreign trade agenda. The program aims to increase the country’s non-oil foreign trade to AED 4 trillion (approximately USD 1.1 trillion) by 2031 and double the economy’s size to surpass USD 800 billion by the same year. Chile and Costa Rica became the first Latin American nations to conclude such agreements with the UAE, marking a new chapter in UAE-Latin America economic relations.
The UAE-Chile CEPA was signed on July 29, 2024, during an official visit by Chilean President Gabriel Boric, who was received by UAE President Sheikh Mohamed bin Zayed Al Nahyan. The agreement entered into force on November 24, 2025.
The UAE-Costa Rica CEPA was signed on April 17, 2024, during a ceremony witnessed by President Sheikh Mohamed bin Zayed Al Nahyan and Costa Rican President Rodrigo Chaves Robles. The agreement came into force on April 1, 2025.
These agreements position Costa Rica as the first Latin American country to conclude a trade agreement with the UAE, while Chile’s CEPA represents the UAE’s second such agreement with a South American nation, following Colombia.
Background: Why Latin America Matters to the UAE
The UAE’s engagement with Latin America is driven by multiple strategic considerations. Chile is the fourth-largest economy in South America with a GDP exceeding USD 300 billion. The country is the world’s largest copper producer and the second-largest lithium producer, with rich agriculture, fishery, and forestry resources. These resources align with the UAE’s priorities in clean energy technology and food security.
Costa Rica, though smaller in size, is recognized as one of the most dynamic economies in Central America. The country has successfully diversified its economy over the past three decades and established preferential access to more than 50 trading partners representing two-thirds of global GDP through various free trade agreements. Costa Rica is the world’s top exporter of fresh pineapples and pineapple juice and ranks among the top exporters of bananas.
Non-oil trade between the UAE and Chile reached USD 306 million in 2023. In 2024, this figure grew to USD 270 million, with the first half of 2025 showing USD 153 million in trade, a 7.1 percent year-on-year increase.
For Costa Rica, non-oil trade with the UAE grew to more than USD 82.6 million in 2024, reflecting a 27.5 percent increase compared to 2023.
Aims of the CEPAs
Strategic Objectives
Both CEPAs share common strategic objectives that align with the UAE’s broader economic vision:
Trade Expansion: The UAE-Chile CEPA is projected to increase non-oil bilateral trade to more than USD 500 million within five years. The initial projection made at signing aimed for USD 750 million by 2030, more than doubling the USD 306 million shared in 2023. The UAE-Costa Rica CEPA builds on existing trade flows with similar growth expectations.
Market Diversification: The agreements support the UAE’s goal of diversifying its trade portfolio beyond traditional partners in Asia and Europe. As Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, stated, “The UAE-Chile CEPA is a significant step forward for our foreign trade ambitions and consolidates our growing relationship with South America.”
Gateway Function: The CEPAs position the UAE as a bridge connecting Latin America with markets in the Middle East, Africa, Asia, and Europe through its world-class logistics network and free trade zones.
Investment Facilitation: Both agreements aim to create pathways for increased two-way investment flows, particularly in priority sectors identified by both parties.
Sector-Specific Goals
The CEPAs target specific sectors where both parties can benefit:
Key Features of the Agreements
Trade in Goods and Tariff Elimination
The UAE-Chile CEPA provides for tariff liberalization covering approximately 99.5 percent of bilateral trade flows. Under this agreement, customs duties will be eliminated or reduced on about 99.5 percent of the value of UAE imports from Chile. The CEPA also aims to boost the value of UAE exports by USD 247 million by 2030, according to official UAE estimates.
The UAE-Costa Rica CEPA offers similar comprehensive tariff reduction. Under this agreement, 99.8 percent of UAE exports to Costa Rica will benefit from immediate tariff elimination or gradual tariff reduction over a maximum of 10 years. Specifically, 97.4 percent of UAE exports to Costa Rica receive immediate tariff elimination. In the reverse direction, 98 percent of Costa Rican exports to the UAE benefit from immediate tariff elimination or gradual elimination over a 10-year period, with 95.99 percent receiving immediate tariff elimination.
Rules of Origin and Trade Facilitation
Both CEPAs include flexible rules of origin designed to enhance two-way trade between the partners. The agreements simplify customs procedures and reduce administrative burdens, which lowers trade costs and speeds up logistics.
The UAE-Chile CEPA covers tariff elimination schedules, national treatment, customs valuation, import licensing, temporary admission, and treatment of repaired goods. It sets disciplines on non-tariff measures, transparency, administrative fees, and export restrictions.
Trade in Services
Both agreements establish clear rules to facilitate cross-border supply of services. The UAE-Chile CEPA liberalizes trade in services, building on WTO services agreements, and ensures market access and national treatment for services suppliers from each partner.
Digital Trade
Both CEPAs bring coherence to the digital trading landscape. The UAE-Chile CEPA includes modern disciplines on digital trade that enhance confidence in digital transactions and ensure digital trade flows benefit both businesses and consumers. Provisions include refraining from imposing customs duties on electronic transactions, affirming the importance of cybersecurity, and providing frameworks for economic collaboration on digital trade issues.
Government Procurement
The UAE-Chile CEPA sets common rules for government purchase contracts and gradually opens up government procurement markets on a reciprocal basis. For the UAE market, this opening is limited to federal-level entities. The UAE-Costa Rica CEPA provides bidders with access to government contracts from over 20 entities in various sectors including education, sports, health, and transport.
Investment Provisions
The UAE already has significant investments in both countries. In Chile, UAE investments include Abu Dhabi-based ADQ’s recent acquisition of Verfrut, a key fruit exporter, and ADIA’s investment in MUT (Mercado Urbano Tobalaba), Chile’s first urban market. In Central America, the UAE has approximately USD 673 million invested across various sectors.
Support for Small and Medium Enterprises
Cooperation Frameworks
Both CEPAs include comprehensive cooperation provisions on labor, environment, and climate, reaffirming commitments to international environmental agreements and outlining joint work on circular economy, biodiversity, water and waste management, low-carbon technologies, renewable energy, and climate change mitigation aligned with the Paris Agreement.
Administrative Structure
The UAE-Chile CEPA has 21 chapters covering various aspects of the trade relationship. The UAE-Costa Rica CEPA includes 18 chapters covering market access, rules of origin, digital trade, support for SMEs, and other topics.
Impact and Benefits for the UAE
Trade Growth
The implementation of both CEPAs is already showing positive results. In 2024, the UAE’s non-oil foreign trade reached an all-time high of USD 817 billion, marking a 14.6 percent increase over 2023. The CEPA program has contributed significantly to this growth.
Since the CEPA program’s launch in September 2021, the initiative has successfully concluded 32 agreements, enhancing trade relations and providing UAE businesses access to markets comprising nearly a quarter of the world’s population.
Enhanced Market Access
The tariff eliminations and reductions provide UAE exporters with competitive advantages in both Chilean and Costa Rican markets. The simplified rules of origin and customs procedures reduce transaction costs and provide certainty and predictability in trading processes.
Chilean products of particular interest include copper, lithium, agricultural products, wine, and seafood. Costa Rican exports to the UAE include medical devices, agricultural goods such as pineapples and bananas, advanced manufacturing components, and products related to renewable energy.
Strategic Gateway Function
The CEPAs strengthen the UAE’s role as a global supply chain hub. The agreements connect South America with markets in Africa, Europe, and Asia through the UAE’s infrastructure and logistics capabilities. This gateway function benefits not only UAE businesses but also creates opportunities for Latin American companies to use the UAE as a platform for expansion into other markets.
Investment Opportunities
The agreements create pathways for increased investment in both directions. For UAE investors, Chile presents opportunities in renewable energy, agriculture, infrastructure, and tourism. The country’s status as a leading producer of copper and lithium aligns with global energy transition trends and offers strategic opportunities for UAE investment.
In Costa Rica, the UAE has already made strategic investments in sectors such as logistics, information technology, renewable energy, and real estate. The CEPA provides a framework to expand these investments and explore new opportunities in advanced manufacturing, eco-tourism, and technology sectors.
Food Security
Both agreements support the UAE’s food security objectives. Chile’s rich agriculture, fishery, and forestry resources, combined with Costa Rica’s position as a top exporter of tropical fruits and agricultural products, provide the UAE with diversified sources of food imports.
The agreements enhance collaboration in agriculture and agrifood sectors, facilitating the establishment of supply chains between producers and buyers with preferential access.
Energy Transition Support
Both Chile and Costa Rica are committed to renewable energy and environmental sustainability. Chile’s lithium resources are crucial for battery technology in electric vehicles and energy storage systems. Costa Rica’s expertise in renewable energy and commitment to sustainable growth align with the UAE’s own clean energy ambitions.
Services Sector Expansion
The liberalization of services trade creates opportunities for UAE service providers in financial services, logistics, tourism, aviation, maritime services, and professional services. The clear rules and market access provisions reduce barriers and create predictable frameworks for service suppliers.
Private Sector Engagement
Both CEPAs create platforms for private sector collaboration. Business forums, such as the high-level UAE-Costa Rica business forum held in Dubai in February 2025, bring together government officials, business leaders, and trade representatives to explore partnership opportunities.
Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers, noted that the CEPAs foster mutual opportunities for business communities in both markets across diverse sectors.
Broader Economic Impact
The CEPAs align with the UAE’s national economic strategy, which targets significant economic growth by the next decade. By expanding the UAE’s network of trade partners and increasing foreign trade, the agreements support the broader goal of economic diversification and sustainable growth.
Beyond Chile and Costa Rica: The Broader CEPA Landscape
The Chile and Costa Rica agreements are part of a broader CEPA initiative. The UAE has concluded multiple Comprehensive Economic Partnership Agreements as of 2025. Several of these deals are currently implemented and operational, including agreements with India, Indonesia, Israel, Turkey, Cambodia, Georgia, Costa Rica, Mauritius, Serbia, and Jordan.
Agreements with other trading partners including Australia, South Korea, Malaysia, New Zealand, Chile, Colombia, Kenya, Ukraine, Vietnam, and other nations are awaiting implementation. Talks have also concluded with the Philippines, Morocco, and Armenia.
The India CEPA, signed in February 2022 and the first bilateral trade agreement of its kind for the UAE, has proven highly successful with significant growth in bilateral non-oil trade following implementation.
The UAE’s Comprehensive Economic Partnership Agreements with Chile and Costa Rica represent a strategic expansion of the country’s economic engagement with Latin America. These agreements go beyond traditional free trade agreements by encompassing trade in goods and services, investment facilitation, digital trade, government procurement, and comprehensive cooperation frameworks.
For the UAE, these CEPAs offer multiple benefits. They provide enhanced access to strategic resources such as Chile’s copper and lithium, support food security objectives through diversified agricultural imports, create opportunities for investment in priority sectors, and strengthen the UAE’s role as a global trade hub connecting multiple regions.
The agreements also reflect shared commitments to sustainable development, environmental protection, and open, rules-based trade. The cooperation provisions on climate change, renewable energy, and women’s economic empowerment demonstrate that these partnerships address not only economic goals but also broader development objectives.
As the agreements are implemented, the projected increases in bilateral trade and investment flows will create tangible benefits for businesses and economies on both sides. The UAE’s approach of concluding multiple CEPAs simultaneously positions the country to achieve its ambitious trade targets.
The Chile and Costa Rica CEPAs also signal to other Latin American nations the opportunities available through economic partnership with the UAE. As more agreements come into force and deliver results, the UAE’s CEPA program continues to reshape global trade patterns and establish new corridors of economic cooperation between the Gulf region and Latin America.
