UAE, Malaysia seek deeper ties after trade reached $4.7bn in 2023

The UAE, one of the Middle East’s largest economies, agreed on Tuesday to forge deeper trade and business cooperation with Malaysia after the two countries’ non-oil trade hit $4.7bn in 2023, maintaining the record-setting levels achieved a year earlier.

“We see considerable potential for greater trade and investment flows, particularly in high-growth sectors such as energy, logistics, manufacturing and financial services, and believe we can collaborate to further develop the Halal economy,” said the UAE’s Minister of State for foreign trade Dr Thani bin Ahmed Al Zeyoudi.

Al Zeyoudi said the two countries recognise the developmental importance of open, rules-based trade and are committed to maximise the opportunities available in each other’s economies.

The UAE and Malaysia agreed to negotiate a Comprehensive Economic Partnership Agreement (CEPA) in May 2023 as the two nations seek to expand their economic ties. Speaking at the World Trade Organization event in Abu Dhabi in February, Malaysian Trade Minister Tengku Zafrul Aziz said the Southeast Asia country expects to conclude a free trade agreement by the end of June.

The trade agreement between the two states is expected to boost investment in Malaysia by the Gulf state’s sovereign wealth funds. Mubadala Investment Company, one of Abu Dhabi’s three sovereign wealth funds, is already an investor in Malaysia.

Following the agreement, Malaysia hopes that the UAE will invest in its energy, digital economy, electric vehicle and chip sectors.

“The UAE is an important partner for Malaysia in the Middle East with whom we share a mutual commitment to enhancing trade and investment through open and fair-trade practices,” Zafrul Aziz, Malaysia’s Minister of Investment, Trade and Industry said.

The UAE has been bolstering its economic ties with the ASEAN bloc, signing CEPAs with Indonesia (July 2022) and Cambodia (June 2023), both of which are now in operation and helping to accelerate bilateral trade.

The Emirates has initiated a raft of bilateral trade, investment and cooperation deals since 2021 to bolster efforts aimed at diversifying income sources and economic sectors. It has so far ratified five CEPAs with India, Israel, Indonesia, Turkey and Cambodia.

The country is also in CEPA negotiations with more markets of strategic importance at the regional and global levels to establish similar agreements.

Read: Malaysia eyes sealing free trade deal with UAE by June