The European Union (EU) and the United Arab Emirates (UAE) have formally launched negotiations for a bilateral Free Trade Agreement (FTA), marking a potential breakthrough towards the EU's first comprehensive trade deal in the Gulf region, said the European Commission.

This initiative also aims to expand further the EU's global trade network, which currently comprises 44 agreements with 76 countries, said the Commission on Wednesday.

According to a press release of the Commission, Commissioner for Trade and Economic Security Maros Sefcovic and UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi met in Dubai to reaffirm their shared vision for the agreement and agree on a roadmap, with substantive work expected to begin as early as June.

The first meetings of negotiating teams will focus on reducing tariffs on goods and facilitating services, digital trade and investment flows reports Xinhua news agency.

Talks will also explore ways to boost trade in strategic sectors, such as renewable energy, green hydrogen and critical raw materials.

Sefcovic emphasized that a bilateral FTA would unlock "tremendous business opportunities" for both European and Emirati enterprises, while also bolstering the EU's regional engagement with Gulf Cooperation Council (GCC) member states.

European Commission President Ursula von der Leyen hailed the launch of the talks as a "significant milestone," noting that the agreement would deepen EU-Gulf ties, create new opportunities for European businesses, and strengthen cooperation in key areas such as renewable energy and digital technologies.

To address the uncertainty of US trade policy, the EU is strengthening cooperation with other economies to promote trade diversification and reduce its reliance on the United States.

Last Friday, US President Donald Trump announced that he is "recommending a straight 50 per cent Tariff on the EU, starting on June 1, 2025." But after a phone call with von der Leyen on Sunday, he agreed to postpone the planned tariff increase until July 9. On Tuesday, Trump welcomed the EU's decision to proceed with negotiations, calling it a positive step, but he again warned that he would enforce trade measures if a deal is not reached.