Japan and the United Arab Emirates have confirmed the successful conclusion of negotiations on a comprehensive Economic Partnership Agreement (EPA), marking Tokyo's latest effort to diversify trade relationships as global supply chains reconfigure amid US-China tensions.
The announcement, confirmed by both governments on March 6, represents Japan's first bilateral EPA with a Gulf state and signals a strategic pivot toward securing energy supplies and expanding market access in the Middle East.
Strategic Trade Diversification
The agreement comes at a critical juncture for Japan's trade policy. As Washington and Beijing move toward economic decoupling, Tokyo has sought to reduce its vulnerability to supply chain disruptions by strengthening ties with resource-rich nations outside the US-China axis.
The UAE, Japan's second-largest oil supplier in the Middle East after Saudi Arabia, exported approximately 25 million kiloliters of crude oil to Japan in 2025. The EPA is expected to include provisions that facilitate long-term energy cooperation, including potential joint ventures in renewable energy and hydrogen development—sectors where both nations have identified strategic interests.
Beyond Energy
While energy security provides the foundation, the agreement reportedly covers a broader range of sectors. Japan has been seeking expanded market access for its automotive, electronics, and infrastructure sectors in Gulf markets. The , meanwhile, has expressed interest in attracting Japanese investment for its economic diversification initiatives, particularly in technology, healthcare, and advanced manufacturing.
