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UAE, Malaysia to sign free trade pact in October

First round of negotiations began in October 2023

Published: Mon 23 Sep 2024, 6:40 PM

By
Issac John

A view of Jebel Ali Port in Dubai. In the first six months of this year, the UAE’s non-oil foreign trade hit a record Dh1.4 trillion. — File photo

The UAE and Malaysia are in the final stages of inking a Comprehensive Economic Partnership Agreement (Cepa), which will take place most likely in October, as both nations aim to bolster their bilateral trade and investment to a higher trajectory.

The signing of the landmark free trade agreement following months of negotiations is most likely to take place during the upcoming UAE visit of Malaysian Prime Minister Anwar Ibrahim next month, sources said.

Final preparations for the signing of the pact have been making headway since a bilateral meeting held in June between Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, and Jarful Abdul Aziz, Malaysia’s Investment, Trade and Industry Minister. The Cepa’s first round of negotiations began in October 2023. As Malaysia’s first free trade agreement with a member of the GCC, the agreement is expected to pave the way for deeper economic collaboration, fostering a conducive environment for increased trade and investment flows, not just between the two nations but between Asean and the GCC regions in general.

“Both our nations 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,” WAM quoted 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 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. In 2023, the two countries reported bilateral non-oil trade worth $4.7 billion, maintaining the record levels achieved in 2022.

On the investment front, as of 2023, 34 manufacturing projects with Emirati participation worth $390 million were implemented and created a total of 2,039 jobs in Malaysia.

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 underway with Japan, Serbia, New Zealand and Ecuador.

alaysian officials said they are optimistic that the signing of the Cepa will further elevate its economic linkages with the UAE as Malaysia’s second largest trading partner in the Middle East region.

Meanwhile, the UAE and Japan have agreed to enter negotiations for an Economic Partnership Agreement, or EPA, as both nations aim to boost ties to ensure a stable supply of crude oil. The UAE was the second-largest crude oil supplier for Japan in terms of volume last year after Saudi Arabia.

Japan also wants tariffs to be cut or abolished on cars and auto parts. Most of the items currently get a five-percent levy. Auto-related exports accounted for over 40 per cent of the value of Japan’s shipments to the UAE last year.