Malaysia and the United Arab Emirates (UAE) signed the Malaysia-UAE Comprehensive Economic Partnership Agreement (CEPA) to unlock new opportunities in trade, investment and economic cooperation between both countries, by at least 60% in five years, contributing to a more sustainable economic growth.

According to Malaysia Prime Minister Datuk Seri Anwar Ibrahim, as the country’s first free trade agreement with a Gulf Cooperation Council (GCC) member country, the agreement is expected to be a catalyst for stronger trade and investment relations between Malaysia, the UAE and even other Gulf countries.

“The Malaysia-UAE CEPA will open up opportunities for a deeper economic cooperation, including tariff elimination or reduction as well as enhanced market access, which will drive exports and create new investment opportunities for key sectors,” he said.

Similarly, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the CEPA is also expected to pave the way for strong comprehensive economic cooperation through trade facilitation as well as market access expansion between Malaysia and the UAE, which is a major trade hub for the Middle East and North Africa (MENA) market.

At the same time that the agreement was signed between Anwar and UAE President Sheikh Mohamed Zayed Al Nahyan, who is also the Abu Dhabi Ruler, Tengku Zafrul held a bilateral meeting with UAE Minister of State for Foreign Trade Dr Thani Ahmed Al Zeyoudi to discuss various issues including the implementation of the CEPA as well as the potential trade and investment in areas of mutual interest.

“The negotiation period for the CEPA which only took place 11 months reflects the commitment of both Malaysia and the UAE to strengthen their economic cooperation for mutual benefit.

“The signing of the CEPA is set to position Malaysia as a dynamic trade and investment hub, opening new opportunities for Malaysian businesses and creating high-value jobs, as well as making Malaysia a gateway for UAE businesses to the ASEAN market,” Tengku Zafrul said.

Additionally, the Malaysian Investment Development Authority (MIDA) – an agency of Tengku Zafrul’s ministry – organised meetings between Anwar and sovereign wealth funds from Abu Dhabi, including the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company as well as the UAE’s leading renewable energy (RE) company MASDAR.

MITI noted that some of the potential key sectors for deeper collaboration include RE, artificial intelligence (AI) and the semiconductor industry, while also welcoming ADIA’s interest to collaborate with Global Infrastructure Partners in the Malaysia Airport Holdings Bhd transformation exercise.

The ministry believes that cooperation in these sectors, along with data centre projects, is expected to add value to Malaysia’s economic development and harness Emirati expertise and capital.

In fact, for the first 11 months of 2024, bilateral trade between Malaysia and the UAE amounted to RM39.53 billion, an increase of 8.6% year-on-year (YoY), reflecting the UAE’s strategic importance as a key economic partner for Malaysia in the region.

In terms of foreign investments, the UAE is one of the biggest investors in Malaysia among the GCC member countries, with 35 manufacturing projects valued at RM1.51 billion being implemented as of September 2024.

MITI reported that these investments created 2,187 job opportunities, contributing to the economic development and growth of the country’s manufacturing sector.

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