Malaysia, one of the fastest growing economies in the Association of South-East Asian Nations, is on track to reach a free trade agreement with the UAE by the end of the year and hopes to explore a broader trade treaty with the wider GCC economic bloc, a senior official said.
Malaysia has “excellent relations with the Middle East” and plans to further boost ties with Arab economies, the country's Minister of Investment, Trade and Industry, Tengku Zafrul Aziz, told the ninth annual Belt and Road summit in Hong Kong.
“This has been the case regardless of the ideological queue of the government in power [in Malaysia], which indicates how strategic the region is to us,” Mr Aziz said on Thursday. “For Malaysia, we are continuing discussions with the GCC for an FTA, and we are on track to conclude an FTA with the UAE by end of the year on a wider scale.”
Malaysia's Investment, Trade and Industry Minister
The UAE, the Arab world’s second largest economy, and Malaysia initiated talks for a comprehensive economic partnership agreement (Cepa) last year and have held several rounds of discussions.
Mr Aziz’s latest comments come after Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, visited Malaysia in June, where the two sides held talks to explore trade and investment opportunities in high-growth sectors such as technology, manufacturing and services.
“Our nations both recognise the developmental importance of open, rules-based trade and are committed to ensuring [that] our private sectors are able to maximise the opportunities available in each other’s economies,” state news agency Wam quoted Dr Al Zeyoudi as saying at the time. “We see considerable potential for greater trade and investment flows … and we look forward to making progress on our Cepa negotiations."
In 2023, the two countries reported bilateral non-oil trade worth $4.7 billion, maintaining the record levels achieved in 2022.
UAE trade treaties
The UAE is actively seeking trade, investment and economic co-operation treaties with nations around the world as it pursues its national economic goal of Dh4 trillion ($1.1 trillion) in foreign trade by 2031. The country is pushing to diversify its economic base and has signed a series of Cepas with fast-growing economies in Asia, the Middle East and Africa, which have already provided a boost to the UAE's non-oil foreign trade.
The Emirates has signed Cepas with Indonesia, the biggest economy in the Asean trading bloc, as well as Cambodia. The UAE is continuing trade discussions with other Asean members, including the Philippines and Vietnam.
In the first six months of this year, the UAE’s non-oil foreign trade hit a record Dh1.4 trillion as a 25 per cent year-on-year surge in non-oil exports helped the aggregate non-oil foreign trade jump 11.2 per cent on an annual basis, the latest government data shows.
The UAE's Cepa programme is expected to grow the country's exports by 33 per cent and contribute more than Dh153 billion to its gross domestic product by 2031. The country, which aims to sign 26 Cepa deals, has already signed trade treaties with India, Turkey, Israel, Cambodia and Georgia, while talks are under way with Serbia, New Zealand and Ecuador.
Boosting GCC trade ties
Hong Kong on Monday said it was exploring options, including free trade agreements, with the UAE and the Gulf to boost trade and investment ties with economies in the region. The pacts being considered include investment protection treaties, as well as economic co-operation deals and avoidance of double taxation agreements, Dr Patrick Lau, deputy executive director of Hong Kong Trade Development Council, told The National at the Belt and Road Summit.
Malaysia also called for a GCC-Asean trade treaty, which will benefit economies in the two blocs. “[Malaysian Prime Minister] Anwar Ibrahim has proposed an Asean-GCC FTA, and this is something that needs to be explored seriously,” Mr Aziz said during his keynote speech in Hong Kong.
Several major global economies are also pursuing trade deals with the Gulf region. Trade and investment relations between China, the world’s second-largest economy, and the GCC, which is home to a third of the world's proven oil reserves, would receive a major boost from a potential FTA.
The UK is also in talks with the GCC over an FTA, while a free trade treaty between the Gulf economies and Turkey is expected to create a $2.4 trillion trade opportunity.
