Executive summary

A Comprehensive Economic Partnership Agreement (CEPA) signed by the United Arab Emirates (UAE) with the Republic of Azerbaijan, entered into force on 15 April 2026. The CEPA is a next-generation trade agreement designed to go beyond traditional tariff liberalization by offering expanded market access, enhanced trade facilitation and a structured platform for long-term economic collaboration. The agreement provides for the elimination or reduction of tariffs on more than 95% of qualifying goods, supported by flexible rules of origin designated to enhance two-way trade, streamlined customs procedures and commitments covering services, investment facilitation, digital trade, intellectual property and small and medium-sized enterprises (SMEs) cooperation.

Detailed discussion

The UAE and Azerbaijan commenced negotiations on the CEPA in December 2023, concluded negotiations in January 2025, and officially signed the agreement on 9 July 2025. The CEPA connects the UAE's role as a global logistics, trade and re-export hub with Azerbaijan's strategic position along key North-South and East-West trade corridors.

The agreement consists of 18 chapters and related annexes, establishing legally binding commitments across trade in goods and services, investment facilitation, customs procedures, technical barriers to trade, sanitary and phytosanitary measures, government procurement, digital trade, intellectual property, economic cooperation, small and medium-sized enterprises (SMEs) support and dispute settlement. Regarding goods, the agreement provides for tariff elimination or reduction on the majority of qualifying products, including goods originating from free zones, subject to compliance with the rules of origin requirements. It also promotes trade facilitation through transparent and predictable customs procedures aligned with international standards.

Importantly, the CEPA represents Azerbaijan's first trade agreement to include a dedicated services chapter, opening structured access in sectors such as financial services, telecommunications and professional services. Collectively, these provisions aim to enhance trade efficiency, reduce non-tariff barriers and encourage deeper private-sector engagement between the two countries. To support effective implementation, the CEPA establishes an administrative and governance framework, including a specialized committee and sub-committees. In particular, a standing Subcommittee on Trade in Goods will monitor implementation and address operational issues, while a dedicated technical council will be established to promote and facilitate bilateral investment flows and tackle investment matters.

Key features of the UAE-Azerbaijan CEPA

The UAE-Azerbaijan CEPA:

• Liberalizes tariffs on more than 95% of qualifying goods, enhancing export competitiveness, with the UAE committing to remove tariffs on 99% of Azerbaijani exports, and Azerbaijan pledging to remove tariffs on 98.5% of UAE-origin goods
• Streamlines trade and lowers compliance costs by simplifying customs procedures, product requirements, technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, and rules of origin
• Preserves the ability of both parties to apply trade remedies, including anti-dumping, countervailing duties and safeguard measures
• Enhances supply chain diversification by enabling partnerships with UAE manufacturing, processing and logistics firms
• Creates new growth opportunities in services trade and investment by promoting services liberalization and facilitating investment
• Strengthens the online environment for businesses and consumers to securely engage in digital trade
• Supports innovation by strengthening the protection and enforcement of intellectual property rights
• Encourages collaboration in priority economic sectors, supports SMEs and creates channels for private-sector engagement

Implications

For businesses, the entry into force of the CEPA is expected to result in lower trade costs, improved market access and greater legal certainty when involved in trade or investments between the UAE and Azerbaijan. UAE exporters may benefit from enhanced competitiveness in the Azerbaijani market due to preferential tariff treatment, while service providers and investors gain access to a clearer and more predictable regulatory framework. The agreement also strengthens the foundation for cross-border investment, joint ventures and regional expansion strategies, particularly for companies seeking to leverage Azerbaijan as a gateway to neighboring markets in the Caucasus and Central Asia. From a strategic perspective, the CEPA reinforces supply chain resilience and supports long-term economic diversification objectives for both countries.