In an effort to encourage bilateral trade and to support a smooth energy transition, the governments of the UAE and Japan have entered into preliminary agreements. The agreement was signed after Dr.Sultan Al Jaber, Minister of Industry and Advanced Technology (MoIAT), UAE special envoy to Japan and COP28 President designate met Yasutoshi Nishimura, Japan’s Minister of Economy, Trade, and Industry. According to the MoIAT statement, the meeting happened on the sidelines of the Abu Dhabi Sustainability Week.
UAE-Japan Bilateral Co-operation
The two nations had entered into a comprehensive economic partnership back in September last year and at Monday’s meeting, the ministers discussed various ways to make their relationship more mutually beneficial. High-level meetings had been initiated in June 2021 for establishing a roadmap for the joint economic partnership of the UAE and Japan which was announced back in 2018.
In June 2021, Al Jaber made a three-day visit to Japan and met with high-profile government officials of Japan including Odawara Kiyoshi, State minister of foreign affairs; Hagiuda Koichi, Minister of Economy; and Tsuyoshi Yamaguchi, Minister of Environment.
The larger goal of attaining carbon neutrality and creating future opportunities for collaboration in view of the upcoming COP28 was also among the topics of discussion during the meeting on Monday. Dr.Al Jaber observed that the UAE and Japan have a long-standing relationship forged by mutual trust of over fifty long years and this has widened the interests of both nations to have an economic partnership.
This is also in alignment with the vision of the wise leadership of the UAE as they expect to increase their cooperation with strategic partners like Japan. Dr.Al Jaber also said that the UAE government expects to get into a long-term partnership with Japan that will foster mutually sustainable economic growth and diversification through cooperation and investments. According to the new agreement, Japan and the UAE companies will be getting into joint investment opportunities through an improved partnership base.
The bilateral relation with Japan started in 1961 when the first crude oil shipment from UAE was sent to Japan from the Umm Al-Shaif offshore oil field at Abu Dhabi.
Abu Dhabi National Oil Company (ADNOC) and Tsubame BHB got into an agreement to identify new research and development cooperation in discovering new methods for the manufacture of commercial-scale ammonia. This deal falls under the Japanese-Emirati partnership for advanced technology and is aimed at connecting Japanese tech start-ups with Emirati investor groups so that a wide-scale expansion is possible enabling innovation and progress.
Last year ADNOC and ICE Futures Abu Dhabi (IFAD) signed agreements with Cosmo Oil Co.Ltd and other Japanese companies to identify pricing strategies for crude oil with reference to the new ICE Murban Crude Oil Futures.
Cosmo Oil Co is a Japanese giant with long-standing partnerships with UAE upstream sectors and also is a shareholder of Abu Dhabi Oil Co.Ltd (ADOC). The deal was signed during the UAE’s virtual business visit to Japan.
Abu Dhabi Future Energy Company, Masdar signed a Memorandum of Understanding (MoU) with the Japanese firm JERA to conduct joint explorations in the field of developing green hydrogen and other forms of renewable energy. Green Hydrogen is one of the most promising sources of renewable alternatives to conventional energy fuels and it reduces the number of carbon emissions in huge industries like shipping, aviation, long haul freight services, etc.
It is an important pillar for a net zero economy and the UAE has ambitions of becoming a net zero economy by 2050. In this regard, the Japanese Ministry of Economy, Trade, and Industry entered into a Memorandum of Cooperation (MoC) with the UAE administration to closely cooperate and aid in the development of ammonia fuel, Hydrogen and carbon recycling.
The UAE has been on a consistent growth rate in the post-pandemic phase and it has recorded growth in all sectors including energy and tourism. 2022 witnessed some major growth in the non-oil sector of the UAE with different nations entering into MoUs and bilateral agreements with the Emirates for exploring investment options and trade relations. The total estimate of non-oil trade between Japan and the UAE reached around AED 481.34 billion during the ten-year period from 2009 to 2019.
As per estimates, the non-oil trade between Japan and the UAE had compounded to AED 49 billion in 2021 and it grew by 4.3 percent in 2022. The UAE exports to Japan were valued at $26 billion and imports from Japan rose to $6.2 billion in 2021. There are more than 340 Japanese companies working in the UAE in various sectors like energy, infrastructure, electronics, etc. These are promising figures that signify a strong economic give and take between the nations and in the coming years, the relationship shall see new growth as they expand to innovative sectors.