Malaysia is poised to join the ranks of nations deepening economic ties with Abu Dhabi as it gears up to sign a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) by June, according to Malaysia’s trade minister.
Trade Minister Tengku Zafrul Aziz disclosed in an interview with Reuters in Abu Dhabi that negotiations between the two countries were reaching their final stages. Aziz expressed optimism that the impending deal would not only solidify economic cooperation but also position Malaysia as a strategic investment hub for UAE ventures in Asia.
The agreement, initiated last May, aligns with Malaysia’s commitment to fostering robust partnerships with key global players through CEPA frameworks. The UAE, having already inked similar pacts with India, Israel, Indonesia, Turkey, and Cambodia, underscores the significance of the forthcoming accord in bolstering bilateral trade and investment ties.
Although bilateral trade between Malaysia and the UAE may not be monumental, it has witnessed substantial growth in recent years. Excluding oil imports, bilateral trade amounted to $2.2 billion in the first half of 2023. UAE's Trade Minister Thani Al Zeyoudi highlighted that the UAE accounted for a significant portion of Malaysia’s trade with Arab nations, emerging as Malaysia’s second-largest trade partner in the Middle East and the 17th globally.
Investment flows between the two nations also demonstrate promising prospects, with UAE investments in Malaysia standing at $220 million and Malaysian investments in the UAE totaling $150 million, as per Zeyoudi.
Upon the signing of the CEPA, Malaysia anticipates a surge in UAE investments across various sectors, including energy, electric vehicles, and microchips. Notably, Mubadala Investment Company, a prominent Abu Dhabi sovereign wealth fund, already holds investments in Malaysia’s energy sector through its subsidiary, Mubadala Energy.
The impending agreement not only reflects Malaysia's growing economic integration with the Middle East but also underscores Prime Minister Anwar Ibrahim's commitment to bolstering relations with the region. Anwar’s vision aims to position Malaysia as a vital economic gateway to the Asia-Pacific region, fostering closer ties with influential economies such as Saudi Arabia.
While negotiations for a free trade pact with the Gulf Cooperation Council, including Saudi Arabia, have been initiated, progress has been sluggish, with talks currently on hold.
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