Malaysia and the UAE forge CEPA to pave the way for a stronger economic partnership

Malaysia's Minister of Investment, Trade and Industry, Tengku Zafrul Aziz expressed confidence that this "historic Free Trade Agreement" will enhance trade, boost investments, and deepen the Malaysia-UAE economic ties.

Malaysia's Minister of Investment, Trade and Industry, Tengku Zafrul Aziz, and UAE Minister of State for Foreign Trade, Dr. Thani bin Ahmed Al Zayoudi, announced on 11 October 2024 the successful conclusion of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between the two countries. 

This agreement is set to eliminate or reduce tariffs, lower trade barriers, foster private-sector collaboration, and create new investment opportunities.

Tengku Zafrul said: "As Malaysia's first, historic Free Trade Agreement with a Gulf Cooperation Council nation, I am confident the CEPA will enhance trade, boost investments, and deepen the Malaysia-UAE economic ties.

The CEPA, he added, is also a" strategic leverage for UAE-based companies to optimise Malaysia as a gateway into the ASEAN market", which he noted will, in turn, provide "tremendous opportunities" for Malaysia's businesses – particularly the SMEs – through integration into regional supply chains, capacity-building and knowledge sharing via the UAE investors.

"MITI looks forward to working closely with H.E. Dr. Thani and the UAE Ministry for Foreign Trade to ensure the swift ratification an implementation of the CEPA."

The CEPA highlights the growing economic ties between Malaysia and the UAE, with bilateral non-oil trade surpassing US$4.9bn in 2023. 

In the first half of 2024, non-oil trade hit US$2.5bn, marking a 7% rise from the same period in 2023. The UAE stands as Malaysia’s second-largest Arab trade partner, representing 32% of Malaysia’s trade with the Arab world. 

Additionally, Malaysia ranks as the UAE’s 12^th-largest trading partner in Asia and fifth within ASEAN. Notably, the UAE accounts for 40% of Malaysia’s exports to the Arab world, underscoring Malaysia’s significant trade footprint in the region.

Dr. Thani said: "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.

"I look forward to working together with H.E Tengku Zafrul Aziz to secure a swift ratification of the CEPA, and to realising long-lasting benefits for us both – and our respective region," he added. 

The UAE’s CEPA initiative aims to boost its non-oil foreign trade to USD 1tn by strengthening ties with key global markets. This strategy will look to deepen connections within the ASEAN bloc, positioning Malaysia as a vital player. 

Malaysia, already benefiting from CEPA agreements with Indonesia and Cambodia, will also stand to gain even more as bilateral trade opportunities continue to expand. This collaboration is therefore expected to enhance Malaysia’s role in the region's economic landscape, further driving growth and trade.

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