The United Arab Emirates (UAE) and the Kingdom of Cambodia have reached an agreement on the terms of a Comprehensive Economic Partnership Agreement (CEPA) that will spur trade and investment cooperation between the two nations. The joint statement announcing the successful conclusion of negotiations was signed by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, and PAN Sorasak, Cambodia’s Minister of Commerce.
The CEPA is expected to lead to an increase in bilateral trade and diversify it by substantially reducing tariffs, reducing non-tariff trade barriers, and promoting trade in goods, services, and investment. The deal builds on growing UAE-Cambodia economic relations, which saw non-oil trade exceeding US$401 million in 2022, representing a growth of 31 percent compared to the previous year and 146 percent more than the pre-Covid year of 2019. Bilateral FDI had reached US$3.8 million by the end of 2020.
The Cambodian economy is one of the most promising in South-East Asia, with growth of 5.1 percent in 2022. The CEPA is expected to provide new opportunities for Cambodia’s key exports, including grains, fruits, meats, processed foods, apparel, footwear, and leather goods. For the UAE, the deal will create new export opportunities in machinery, oils and lubricants, cars and automotive parts, and investment opportunities in logistics and infrastructure, travel and tourism projects, and renewable energy.
Dr. Al Zeyoudi hailed the signing as another important step in the UAE’s foreign trade agenda, which was launched in September 2021. He emphasized that Cambodia is one of the fastest-growing economies in South-East Asia, and this deal will help strengthen East-West supply chains, offer an important new market for UAE manufacturers, investors, and service providers, and provide exporters an important platform for global expansion. Cambodia’s food production and agricultural sectors, which are critical parts of its economy, will also help the UAE achieve its food security ambitions.
Sorasak expressed his agreement with Dr. Al Zeyoudi on the great prospects for UAE-Cambodia CEPA and Cambodia’s consistent adherence to trade liberalization. He emphasized that the conclusion of negotiations culminates in their shared view and common understanding of all elements of the CEPA. Sorasak added that he believed the agreement would be a great impetus for shared growth and prosperity through fostering supply chains, enhancing trade flow, and promoting bilateral investment between Cambodia and UAE.
The agreement will serve as a catalyst for greater connectivity between ASEAN and the Arab World, two of the most economically dynamic regions in the world. The UAE’s new foreign trade agenda is a core component of the nation’s growth strategy that seeks to double the size of the economy from US$381 billion to US$762 billion by 2030. The UAE has signed CEPAs with India, Israel, Indonesia, and Türkiye and is set to conclude negotiations with other strategically important nations in the coming weeks.
The Royal Government of Cambodia is supportive of globalization by opening up international trade to ensure that cooperation is at the heart of sustainable and inclusive economic development. To this end, Cambodia has achieved bilateral FTAs respectively with China and South Korea and mega FTAs under ASEAN and RCEP.
