UAE seals bilateral trade talks with Malaysia

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The UAE and Malaysia have concluded talks on a bilateral trade deal known as a Comprehensive Economic Partnership Agreement (CEPA), a deal that is expected to boost investment in the Southeast Asian country by the Gulf state’s sovereign wealth funds.

The trade agreement, which is expected to facilitate trade and investment flows, builds on deepening economic ties between the two nations, which saw bilateral non-oil trade exceeding $4.9bn in 2023.

Non-oil trade between the UAE and Malaysia reached $2.5bn in the first half of 2024, a 7 per cent increase compared to the same period in 2023.

The UAE is a significant trading partner for Malaysia, particularly within the Arab world. It ranks as Malaysia’s second-largest trade partner in this region, accounting for 32 per cent of Malaysia’s total trade with Arab nations.

In terms of merchandise exports, the UAE is the destination for 40 per cent of Malaysia’s goods exported to the Arab world.

Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, emphasised that the UAE’s ongoing efforts to establish CEPAs with various countries around the globe demonstrate its strategic vision.

“Malaysia is a long-standing and trusted trade partner that, like the UAE, is seeking to enhance its economic prospects through increased trade and targeted investment,” said Al Zeyoudi.

“As the fourth-largest economy in the Southeast Asia region, and with economic growth in 2024 set to outstrip forecasts, Malaysia offers substantial opportunity for our exporters, industrialists and business leaders, especially in high-growth sectors such as energy, logistics, manufacturing and financial services.”

The UAE’s CEPA programme aims to increase the country’s non-oil foreign trade to Dhs4tn by expanding relations with strategically important markets around the world. It has seen the UAE strengthen ties with the ASEAN bloc, with CEPA with Indonesia and Cambodia now in operation, each helping to accelerate bilateral trade.

“The CEPA is also a strategic lever for UAE-based companies to optimise Malaysia as a gateway into the ASEAN market, which in turn, will provide tremendous opportunities for our businesses – particularly the SMEs – through integration into regional supply chains, capacity-building and knowledge sharing via the UAE investors,” said Zafrul Aziz, Minister of Investment, Trade and Industry for Malaysia.

The UAE’s non-oil trade reached a record Dhs1.4tn in H1 2024, an 11.2 per cent increase in foreign trade compared to the corresponding period a year ago.

Earlier in October, the Gulf state signed CEPA agreements with Serbia and Jordan. It also signed bilateral trade agreements with Australia and New Zealand in September.

The UAE has initiated a raft of bilateral trade, investment, and cooperation deals since 2021 to bolster efforts to diversify income sources and economic sectors. To date, it has ratified five CEPAs with India, Israel, Indonesia, Türkiye, Cambodia, and Georgia. It is also in negotiations with more markets of strategic importance at the regional and global levels, including Congo-Brazzaville and Thailand.

Read: The UAE’s latest CEPA deal is with this Arab nation