The UAE and Malaysia have agreed to start negotiations on a Comprehensive Economic Partnership Agreement to boost trade ties between the two countries.
A joint statement to start talks on the trade deal was signed on the sidelines of the official visit of Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, to the Malaysian capital Kuala Lumpur, state-news agency Wam reported on Tuesday.
The negotiations “have built upon strong growth in bilateral trade and investment over recent years”, said Dr Thani Al Zeyoudi, Minister of State for Foreign Trade.
Non-oil trade between the UAE and Malaysia reached $4.6 billion in 2022, a growth of 5 per cent compared with the previous year and up 31 per cent from 2020.
“Today, the UAE is Malaysia’s 17th trade partner globally and the second in the Middle East, accounting for 32 per cent of Malaysia’s trade with Arab countries,” Dr Al Zeyoudi said.
“The UAE is also the first destination for Malaysian merchandise exports to Arab countries, accounting for 40 per cent of its exports to the region. The other way, Malaysia ranks eighth globally for UAE exports and 19th in re-exports.”
The value of Malaysian investments in the UAE amounts to $150 million across the sectors of industry, building and construction, real estate, trade, transport, storage, financial activities, insurance, and professional and technical activities, he said.
Meanwhile UAE investments in Malaysia stand at more than $220 million, including more than $51 million in the industrial sector.
The UAE, the Arab world’s second-largest economy, is seeking to develop closer trade and investment relations with partners around the world.
It is working towards signing 26 Cepas as it seeks to diversify its economy, Minister of Economy Abdulla bin Touq said in March.
In April, it finalised the terms of a similar pact with Cambodia and also recently concluded negotiations for a new trade deal with Georgia.
The UAE also started talks for Cepa deals with Costa Rica as well as with Thailand and Vietnam.
“With the commencement of negotiations for the Malaysia-UAE Cepa, Malaysia is committed to enhancing the long-standing economic partnership with the UAE,” said Tengku Zafrul Aziz, Malaysian Minister of Investment, Trade and Industry.
“It will set the stage for a comprehensive and mutually beneficial economic framework that will forge stronger strategic collaborations, foster innovation, spur economic growth, and create job opportunities for both nations.”
The UAE’s foreign trade agenda is part of the nation’s growth strategy that seeks to double the size of the economy to $762 billion by 2030.
Last year, the Emirates’ non-oil foreign trade surged 17 per cent annually to reach a record Dh2.23 trillion ($607.2 billion).
This was the first time the UAE’s non-oil foreign trade crossed the Dh2 trillion mark.
Non-oil trade between the UAE and India has jumped following the signing of the Cepa deal last year and is expected to exceed $50 billion this year.
In the first 11 months of the Cepa between the two countries – between May 1, 2022 and March 31, 2023 – bilateral non-oil trade reached $45.5 billion, Dr Al Zeyoudi said this month.
This was a 7 per cent increase from the same period a year ago.
“We're going to exceed $50 billion for sure this year for non-oil trade and this means we're moving towards the right direction of $100 billion by 2030 … we're going to push by all means to ensure that we hit the target even earlier,” Dr Al Zeyoudi told The National on the sidelines of the Annual Investment Meeting.
The UAE aims to implement Cepa deals with Indonesia and Turkey “soon”, according to the Wam report.