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UAE and Malaysia edge closer to free trade deal

By Gavin Gibbon
HONG KONG, CHINA - SEPTEMBER 11: Attendees participate in the Ninth Belt and Road Summit at Hong Kong Convention and Exhibition Centre on September 11, 2024 in Hong Kong, China. The Summit gathers senior government officials and business leaders from countries and regions along and beyond the Belt and Road to exchange insights on multilateral co-operation and explore concrete business opportunities. (Photo by Hou Yu/China News Service/VCG )No Use China. Hou Yu/China News Service/VCG via Reuters Connect
The ninth annual Belt and Road summit; speaking there, Malaysia’s minister of investment said a deal between Malaysia and the UAE is 'on track to conclude'
  • Cepa expected by end of year
  • 2023 non-oil trade worth $4.7bn
  • Al Zayoudi: ‘considerable potential’

The UAE is expected to sign a free trade deal with Malaysia by the end of the year as it strengthens its ties with countries in south-east Asia.

The update was delivered by Tengku Zafrul Aziz, Malaysia’s minister of investment, trade and industry, at the ninth annual Belt and Road summit in Hong Kong. Aziz said the two countries were close to signing a comprehensive economic partnership agreement (Cepa).

After several rounds of discussions, which started last year, Zafrul Aziz said they are “on track to conclude” the trade deal by the end of 2024.

The UAE is Malaysia’s second-largest trading partner in the Middle East after Saudi Arabia, making up around a third of its overall trade with Arab nations, while Malaysia is ranked eighth among non-Arab Asian countries for UAE exports.

In 2023, Malaysia and the UAE shared non-oil trade worth $4.7 billion dollars, maintaining the record levels achieved in 2022.

“We see considerable potential for greater trade and investment flows, particularly in high-growth sectors such as energy, logistics, manufacturing and financial services, and believe we can collaborate to further develop the Halal economy,” said Dr Thani bin Ahmed Al Zeyoudi, minister of state for foreign trade, on a visit to Malaysia in June.

The UAE-Malaysia relationship is part of growing ties with the wider Asean bloc of 10 countries that also incorporates Brunei, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

In May 2022 the UAE signed a Cepa with Indonesia, which came into force in September 2023, while a similar agreement with Cambodia was activated at the end of January.

Negotiations are also well underway with the Philippines and Vietnam, the latter finalising terms on a deal to build on bilateral trade worth nearly $9 billion.

UAE President Sheikh Mohamed bin Zayed Al Nahyan announced plans earlier this month to start negotiations with Japan on a Cepa.

The UAE has signed 11 such agreements with countries across the world so far since launching its Cepa programme in September 2021. The programme aims to increase the country’s non-oil foreign trade to AED4 trillion ($1 trillion) by 2031.

UAE-Malaysia trade highlights
  • Retail chain Brands For Less has revealed plans to open a store in Malaysia as part of expansion plans in the East
  • In July a joint venture between Malaysia’s HSS Engineers Berhad and its Emirati consultancy, HSS, won a $316 million contract to oversee the construction of the new Baghdad metro
  • A consortium that includes the UAE’s Abu Dhabi Investment Authority announced in May a voluntary offer to acquire all the shares in Malaysia Airports Holdings Berhad for nearly $4 billion
  • Abu Dhabi state clean energy company Masdar announced in October last year plans to invest $8 billion in producing up to 10 gigawatts of renewable energy projects to help Malaysia realise its sustainable energy goals

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