The UAE and Cambodia are looking to double non-oil trade to $1bn by 2030 after a Comprehensive Economic Partnership Agreement has officially entered into force.
The CEPA deal promises to enhance trade flows, create opportunities for strategic investment, and accelerate economic diversification for both countries.
The agreement will do so through the removal or reduction of tariffs on more than 92 per cent of product lines, eliminating unnecessary barriers to trade, and improving market access for service exports.
UAE-Cambodia trade
The UAE-Cambodia Comprehensive Economic Partnership Agreement is the fifth CEPA to come into force.
The deal has the potential to more than double the total value of non-oil trade between the UAE and Cambodia to $1bn by 2030.
It builds on growing bilateral relations that resulted in non-oil trade exceeding $407m in 2022, a growth of 33 per cent compared to 2021.
In the first nine months of 2023, the UAE’s non-oil foreign trade with Cambodia exceeded $300m, comparable to the same period in 2022 and 30.5 per cent more than 2021 figures.
One of the most promising economies in South-East Asia, Cambodia experienced 5.2 per cent growth in 2022, building on an annual growth rate of 7.7 per cent between 1998 and 2019.
Through the deal, the UAE will benefit from new export opportunities in machinery, oils and lubricants, and cars and automotive parts, while key exports expected to benefit in Cambodia include:
- Grains
- Fruits
- Meats
- Processed foods
- Apparel
- Footwear
- Leather goods
The deal is also expected to accelerate investment flows between the two countries in priority sectors, including logistics and infrastructure, travel and tourism projects and renewable energy.
Bilateral FDI stood at $3.8m by the end of 2020, while at the end of H1 2022, total UAE investment flows into Cambodia reached almost $3m.
“This deal lays the foundations for a future-facing partnership that creates new opportunities, drives investment in priority sectors and accelerates the global economic security.
“By strengthening East-West trade routes, we look forward to the deal unearthing the wealth of benefits borne from open, rules-based trade, a system in which our two nations share a common belief.”
Cham Nimul, Minister of Commerce of Cambodia, said: “The Cambodia-UAE CEPA is unique for both of us. It will enhance the relations and cooperation between the two countries and will reinforce the growing links between Arab world and ASEAN.
“The two regions are today amongst the most economically dynamic regions in the world. Therefore, there are potential growth to be explored. The UAE can be Cambodia’s base for the Arab market. Likewise, Cambodia can be the UAE’s base for the ASEAN region.”
She stressed that the CEPA between Cambodia and the UAE will serve as a great impetus for shared growth by fostering supply chains, enhancing trade flow, promoting bilateral investment, and giving rise to the economic synergy for inclusive, resilient and sustainable growth for both countries and beyond.
The Comprehensive Economic Partnership Agreement is a vital component of the UAE’s foreign trade agenda, which seeks to establish stronger, more integrated trading relationships with the most dynamic markets worldwide.
In addition to Cambodia, the UAE has signed and implemented CEPAs with several other countries.