Dubai, UAE – October 16, 2024 – The UAE and Malaysia have successfully concluded negotiations for the Comprehensive Economic Partnership Agreement (CEPA), a strategic initiative aimed at enhancing bilateral non-oil trade and investment.
Key Objectives of CEPA
The CEPA, finalized through discussions led by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, and Zafrul Aziz, Malaysia’s Minister of Investment, Trade and Industry, seeks to:
- Eliminate or Reduce Tariffs: Streamlining trade processes to lower costs for businesses.
- Reduce Trade Barriers: Facilitating smoother trade flows between the two nations.
- Promote Private-Sector Collaboration: Encouraging partnerships that enhance economic synergies.
- Establish New Investment Pathways: Opening avenues for mutual investments in key sectors.
Strengthening Bilateral Relations
Dr. Al Zeyoudi emphasized the significance of this milestone, stating that it reflects the productive relationship that has developed between the UAE and Malaysia. He noted, “Malaysia is a long-standing and trusted trade partner that seeks to enhance its economic prospects through increased trade and targeted investment.”
In 2023, bilateral non-oil trade between the two countries exceeded $4.9 billion, with $2.5 billion recorded in the first half of 2024 alone—marking a 7% increase from the previous year. Malaysia ranks as the UAE’s 12th-largest Asian trading partner and fifth among ASEAN countries.
Economic Growth and Opportunities
The UAE aims to increase its non-oil foreign trade to Dh4 trillion through the CEPA program by strengthening ties with strategically important markets. This agreement with Malaysia complements similar agreements with Indonesia and Cambodia, enhancing trade across the ASEAN region.
Minister Aziz highlighted that this is Malaysia’s first free trade pact with a GCC nation, emphasizing its potential to enhance trade, boost investments, and deepen economic ties. He remarked, “The CEPA is a strategic lever for UAE-based companies to optimize Malaysia as a gateway into the ASEAN market.”
Sectoral Focus and Future Prospects
The agreement opens opportunities for exports of Malaysian goods, such as electrical and electronics, machinery, and agricultural products, which will benefit from zero import duties upon the CEPA’s implementation. Both countries foresee significant growth in sectors like energy, logistics, manufacturing, and financial services.
Dr. Al Zeyoudi reiterated the UAE’s commitment to building strategic partnerships that stimulate sustainable economic growth and increase trade and investment flows, aligning with the nation’s forward-looking vision.
As both nations move forward, the CEPA is expected to be a catalyst for increased economic cooperation, driving innovation and competitiveness in the global marketplace.
