UAE signs bilateral trade deal with Cambodia
Gulf Business | 8 June 2023
UAE signs bilateral trade deal with Cambodia
BY KUDAKWASHE MUZORIWA
The UAE and Cambodia have signed a Comprehensive Economic Partnership Agreement (CEPA) agreement that is expected to more than double non-oil bilateral trade from $407m in 2022 to $1bn within five years.
The bilateral trade deal with Cambodia, the UAE’s fifth since the launch of its trade strategy in 2021, will reduce or remove unnecessary trade barriers, facilitate investments, open market access to services exports, and create more opportunities for businesses to forge new partnerships.
“This CEPA will build a corridor of opportunity between the Arabian Gulf and South-East Asia by reducing or removing tariffs, eliminating trade barriers, and creating new avenues for strategic investment,” Dr Thani Al Zeyoudi, Minister of State for Foreign Trade said in a tweet, adding that the UAE is the new global gateway.
The Emirates is Cambodia’s top trading partner in the Arab world, accounting for 70 per cent of its trade with the region in 2022. Bilateral trade between the two countries soared by 33 per cent to reach a record $407m in 2022 compared to the previous year and a 28 per cent jump compared to 2019.
The deal holds significant potential for mutual investments, providing opportunities for the business communities to enter into investment partnerships. The UAE currently invests over $3m in Cambodia compared to $1m in direct foreign investment from the South Asian state.
However, a wide range of opportunities for investment in tourism, logistics, infrastructure and renewable energy are expected with the implementation of the CEPA deal. It guarantees improved access for UAE products to the Cambodian market, covering 92 per cent of customs tariff lines and over 93 per cent of the value of non-oil trade.
Dr Al Zeyoudi said the bilateral trade agreement will not only contribute to the UAE’s goal to double non-oil foreign trade by 2031 but also expand the country’s presence in the rapidly growing economies of Southeast Asia.
Similarly, it further opens up various service sectors in the Cambodian market for UAE businesses. The deal should increase exports of grains, fruits, meats, clothing and leather goods, among other items, from Cambodia and exports from the UAE of machinery, oil and lubricants.
The two countries will also explore investment opportunities in logistics, infrastructure, travel and renewable energy.
UAE expands trade corridors
Meanwhile, the UAE has so far concluded five CEPAs with India, Israel, Indonesia, Turkey and Cambodia, and the first two have already come into force. The Gulf state is currently in talks with more markets of strategic importance at the regional and global levels to establish similar agreements.
The UAE agreed to start preliminary negotiations on a bilateral trade deal with Costa Rica, Thailand, Malaysia and Vietnam.
Last month, the UAE agreed to start preliminary negotiations on a bilateral trade agreement with Malaysia. The Gulf state 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.
Non-oil trade between the two countries is on an upward trajectory after reaching $4.6bn in 2022, a 5 per cent increase compared to 2021 and up 31 per cent and 18 per cent compared to 2020 and 2019, respectively.
The trade and investment exchanges between the UAE and Costa Rica continue to grow as the non-oil trade reached $58.7m in 2022, a 19 per cent growth from a year earlier. Similarly, trade and investment exchanges with Vietnam totalled Dhs13.5bn in 2022, up 9 per cent from 2021 and with a 34 and 26 per cent growth from 2020 and 2019, respectively.
The Gulf state also seeks to bolster its bilateral economic relations with South Africa, Poland and Italy while boosting investment opportunities in key sectors including renewable energy, tourism and finance.
