UAE And Malaysia Conclude Negotiations For Comprehensive Economic Partnership Agreement To Boost Trade

Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, and Zafrul Aziz, Malaysia's Minister of Investment, Trade and Industry, have announced the completion of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between their countries. This agreement aims to remove or reduce tariffs, lower trade barriers, encourage private-sector cooperation, and create new investment opportunities.

The UAE and Malaysia have been strengthening their economic ties. In 2023, their bilateral non-oil trade surpassed US$4.9 billion. During the first half of 2024, this trade reached US$2.5 billion, marking a 7% increase compared to the same period in 2023.

Malaysia ranks as the UAE’s 12th-largest Asian trading partner and fifth among ASEAN countries. Meanwhile, the UAE is Malaysia’s second-largest trade partner in the Arab world, accounting for 32% of Malaysia’s trade with Arab nations. The UAE also receives 40% of Malaysia's merchandise exports to the Arab world.

Al Zeyoudi highlighted that the UAE's progress in forming Comprehensive Economic Partnership Agreements with promising economies worldwide reflects its leadership's forward-thinking vision. These agreements aim to build strategic partnerships that boost trade and investment flows while promoting sustainable economic growth.

He noted that this milestone reflects productive relations between the UAE and Malaysia and Southeast Asia as a whole. "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," he said.

Zafrul Aziz expressed confidence in the CEPA's potential benefits: "As Malaysia's first, historic Free Trade Agreement with a GCC nation, I am confident the CEPA will enhance trade, boost investments, and deepen the Malaysia-UAE economic ties."

Expanding Market Access

The CEPA will allow Malaysian exports such as electronics, machinery, jewellery, foodstuff, tropical fruits, palm oil, cocoa, and rubber to enjoy zero import duties when it comes into effect. This agreement positions the UAE as a strategic hub for Malaysian exporters to access markets in the Middle East, North Africa, and parts of Europe.

The CEPA also serves as a strategic tool for UAE-based companies to use Malaysia as an entry point into the ASEAN market. This will provide significant opportunities for businesses—especially SMEs—through regional supply chain integration and knowledge sharing via UAE investors.

Future Prospects

The UAE’s CEPA programme aims to increase its non-oil foreign trade to AED4 trillion by expanding relations with strategically important markets globally. Agreements with Indonesia and Cambodia are already operational under this programme.

Zafrul Aziz added that MITI looks forward to collaborating closely with Dr. Thani bin Ahmed Al Zeyoudi for swift ratification and implementation of the CEPA: "The CEPA is also a strategic lever for UAE-based companies to optimise Malaysia as a gateway into the ASEAN market."

With inputs from WAM