The UAE and Malaysia have concluded negotiations on a comprehensive economic partnership agreement (Cepa) that seeks to ease tariffs, reduce trade barriers, promote private-sector collaboration and boost investments.
The deal reflects the “productive relations” between the UAE and Malaysia – and South-East Asia as a whole – with the Asean country being a long-standing and trusted trade partner that, like the Emirates, is seeking to strengthen its economic prospects through increased trade and targeted investment, Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, said in a statement on Thursday.
“As the fourth-largest economy in the South-East 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,” he said.
Malaysia's economy is expected to grow 4.4 per cent in 2024, according to the International Monetary Fund, up from 3.7 per cent last year.
The deal builds on deepening economic ties between the two countries, which in 2023 recorded bilateral non-oil trade of more than $4.9 billion, according to Mr Al Zeyoudi. In the first half of 2024, non-oil trade reached $2.5 billion, a 7 per cent increase from the same period last year.
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 per cent of Malaysia’s trade with Arab nations. The Emirates is also the destination for 40 per cent Malaysia’s merchandise exports to the Arab world.
“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,” Tengku Zafrul Aziz, Malaysia's Minister of Investment, Trade and Industry, said. “We view the UAE as a strategic hub for Malaysian exporters to access markets in the Middle East, North Africa and certain parts of Europe.”
Malaysian exports such as electronics, machinery, jewellery, prepared food, tropical fruits, palm oil, cocoa and rubber would immediately benefit from zero import duties when this agreement comes into force, he added.
“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,” Mr Aziz said.
