- The UAE has so far concluded four CEPAs with India, Israel, Indonesia and Turkey and the first two have already come into force
According to Gulf Business article published on May 24, 2023, the UAE and Malaysia have agreed to start preliminary negotiations on a bilateral trade agreement targeting a broad expansion of economic ties, according to the state-run news agency WAM.
The agreement to launch Comprehensive Economic Partnership Agreement (CEPA) talks between the two countries was signed on the sidelines of the official visit of Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, to Malaysia.
Minister of State for foreign trade Dr Thani bin Ahmed Al Zeyoudi said the CEPA talks have built upon strong growth in bilateral trade and investment over recent years.
“Non-oil trade between the UAE and Malaysia continues its upward trajectory over the past five years, reaching $4.6bn in 2022, a growth of 5 per cent compared to 2021 and up 31 per cent and 18 per cent compared to 2020 and 2019, respectively,” said Dr Al Zeyoudi.
“The UAE is Malaysia’s 17th trade partner globally and the second in the Middle East, accounting for 32 per cent of Malaysia’s trade with Arab countries.”
Al Zeyoudi highlighted that the value of Malaysian investments in the Emirates amount to $150m across the industry, real estate, financial activities, insurance, and professional and technical activities sectors.
Similarly, the UAE investments in Malaysia amount to more than $220m including more than $51m in the industrial sector.
UAE’s trade network
The CEPA with Malaysia comes as part of the UAE’s plans to expand its network of trade partners with strategically important markets.
Malaysia is the fourth largest economy in the Southeast Asian region and its economy continues to achieve record growth rates owing to the strong global demand for its electronics products in particular.
“The UAE consistently holds its position as a crucial and strategic trading partner for Malaysia in the Middle East, while Malaysia is an ideal gateway for the UAE to venture into the Asia Pacific market,” said Tengku Zafrul Aziz, Minister of Investment, Trade and Industry of Malaysia.
The negotiations with Malaysia are the latest under the UAE’s ambitious foreign trade agenda, which has so far seen the conclusion of 4 CEPAs with India, Israel, Indonesia and Turkey. Agreements with India and Israel have been entered into force, while those with Indonesia and Turkey are soon to be implemented.
The Gulf state is currently in talks with more markets of strategic importance at the regional and global levels to establish similar agreements. The UAE agreed to start preliminary negotiations on a bilateral trade deal with Costa Rica, Thailand and Vietnam.
The trade and investment exchanges between the UAE and Costa Rica continue to grow as the non-oil trade reached $58.7m in 2022, a 19 per cent growth from a year earlier. Similarly, trade and investment exchanges with Vietnam totalled Dhs13.5bn in 2022, up 9 per cent from 2021 and with a 34 and 26 per cent growth from 2020 and 2019, respectively.
The World Trade Organisation’s (WTO) Global Trade Outlook and Statistics Report 2022, said that the UAE’s trade in goods with the rest of the world hit $1.024tn in 2022/, as the share of both exports and imports increased on the back of higher oil prices.
The country also seeks to bolster its bilateral economic relations with South Africa and Italy as well as boost investment opportunities in key sectors including renewable energy, tourism and the fintech sector.
