Malaysia eyes sealing free trade deal with UAE by June

Malaysia expects to conclude a free trade agreement with the United Arab Emirates by the end of June, the country’s trade minister said, adding the deal could boost investment in Malaysia by the GCC state’s sovereign wealth funds.

The countries started negotiations over a Comprehensive Economic Partnership Agreement (CEPA) last year.

“We are in the last round of discussions,” Malaysian Trade Minister Tengku Zafrul told Reuters on Tuesday in an interview at a World Trade Organisation meeting in Abu Dhabi.

READ MORE: UAE-Cambodia CEPA goes into effect: Here’s how free trade pacts lift growth

Hope for UAE investment

Following the agreement, Malaysia hopes that the UAE will invest in its energy, digital economy, electric vehicle and chip sectors. Mubadala Investment Company, one of Abu Dhabi‘s three sovereign wealth funds, is already a investor in Malaysia.

The UAE has signed a series of bilateral free trade agreements in recent years, including with India and Israel. As well as removing traditional tariffs on goods and services, deals have included preferential investment clauses.

Tengku Zafrul said the trade deal could lead to Malaysia becoming a hub for UAE investments in Asia.

He said there had been no progress on a broader free trade agreement between ASEAN and the six-member Gulf Cooperation Council (GCC), which includes the UAE and Saudi Arabia.

Tengku Zafrul said Malaysia was talking with the European Union for free trade agreement but cautioned that momentum behind a US-led Indo-Pacific agreement had slowed down.