WELLINGTON/BRUSSELS - The European Union (EU) and the United Arab Emirates (UAE) have agreed to kick off free trade negotiations, European Commission President Ursula von der Leyen said on Thursday.

"This marks a positive step forward in EU-UAE relations and, alongside the negotiation of broader Strategic Partnership Agreements, can serve as a catalyst for stronger ties between the EU and the Gulf Cooperation Council (GCC)," the Commission said in a statement.

European Commissioner for Trade and Economic Security Maros Sefcovic is expected to travel to the UAE soon to advance the discussions, the Commission said.

The negotiations will aim to liberalize trade in goods, services, and investment, while expanding cooperation in strategic areas such as renewable energy, green hydrogen, and critical raw materials, the Commission said.

Although US President Donald Trump abruptly announced a 90-day pause on the sweeping "reciprocal" tariffs he unveiled last week, which include a 20 percent levy on the EU imports, EU is scrambling to diversify trading partners.

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Von der Leyen expressed confidence about the progress, saying both sides were committed to moving "swiftly and ambitiously."

The EU is the UAE's second-largest trade partner, accounting for 67.6 billion dollars in non-oil trade in 2024. It represents 8.3 percent of the UAE's total non-oil foreign trade, according to UAE official data. 

Separately, the New Zealand government is moving swiftly to ratify the New Zealand-UAE Comprehensive Economic Partnership Agreement, aiming to give exporters greater certainty amid global trade challenges.

New Zealand Trade and Investment Minister Todd McClay made the announcement on Thursday, adding the implementation bill for the NZ-UAE agreement passed its first reading in parliament.

"New Zealand exporters are facing international headwinds with increased tariffs into the United States," McClay said, adding both New Zealand and the UAE agreed to accelerate the agreement's enactment.

Once in force, the deal will remove tariffs on 98.5 percent of New Zealand exports to the UAE, increasing to 99 percent within three years. It also improves market access for services and eases non-tariff trade barriers, McClay said.