Middle East Forbes - 27 April 2023

UAE strikes economic partnership agreement with Cambodia to enhance global ties
By Syed Sadain Gardazi

The UAE and Cambodia have finalized the terms for a Comprehensive Economic Partnership Agreement (CEPA) as the Gulf state seeks to enhance its global trade and commerce ties to fulfill its new foreign trade agenda.

Agreement details
The conclusion of successful negotiations that spanned six months was marked with the signing of a joint statement by UAE’s Minister of State for Foreign Trade Dr. Thani bin Ahmed Al Zeyaudi and Cambodian Minister of Commerce PAN Sorasak, state-run news agency WAM reported Thursday.

With the new framework in place, tariffs would be substantially eliminated, and non-tariff trade barriers would be reduced while promoting bilateral trade in goods, services, and investment.

Cambodia’s major exports, including leather goods, apparel, footwear, meats, fruits, grains, and processed foods would take advantage of CEPA’s lower tariffs. UAE would be subsequently able to utilize new export opportunities for its manufacturing and industrial sectors along with investment opportunities for renewable energy, travel, and tourism projects, in addition to the logistics and infrastructure sector, WAM added.

“Cambodia is one of the fastest-growing economies in South-East Asia and this deal will help strengthen East-West supply chains, deliver an important new market for our manufacturers, investors, and service providers, and offer their exporters an important platform for global expansion," said Dr. Al Zayaudi.

"Cambodia’s food production and agricultural sectors, which are a critical part of their economy, will also help us achieve our food security ambitions,” he added.

UAE strategy
The CEPA program is a major part of the UAE’s economic development strategy launched in September 2021. It aims at doubling the size of its economy to $762 billion by 2030. The UAE has CEPAs signed with Indonesia, India, and Türkiye while similar agreements with other “strategically important” nations are also in the negotiation phase.

Key background
The non-oil trade between UAE and Cambodia exceeded $401 million in 2022, marking a 31% rise from 2021 and a 146% rise from the pre-COVID year of 2019. Bilateral foreign direct investment (FDI) between the two countries stood at $3.8 million by 2020-end.

Cambodia’s economy grew with a gross domestic product (GDP) growth of 5.2% in 2022. The Southeast Asian country has signed bilateral free trade agreements (FTAs) with China and South Korea and multilateral FTAs under the Regional Comprehensive Economic Partnership (RCEP) and Association of Southeast Asian Nations (ASEAN).