Trade

UAE’s Cambodia trade deal sets $1bn non-oil target

February 22, 2024, 4:17 AM

A fruit market in Phnom Penh. Cambodia hopes the Cepa will increase its fruit exports to the UAE

2022 non-oil trade worth $400m
Cepa will accelerate investment flows
GCC-Asean relationship developing

The UAE’s comprehensive economic partnership agreement (Cepa) with Cambodia has come into force as the countries aim to more than double non-oil trade by the end of the decade.

The agreement will remove or reduce tariffs on more than 92 percent of product lines, eliminating barriers to trade and improving market access for service exports.

The Cepa with Cambodia is the UAE’s fifth, after agreements with India, Israel, Indonesia and Turkey.

Thani bin Ahmed Al Zeyoudi, the UAE’s minister of state for foreign trade, said the value of non-oil trade last year with the UAE’s Cepa partners – both those implemented and those nearing conclusion – was more than AED390 billion ($106 billion), 24.5 percent up on 2022.

He said Turkey was the best performer, with trade more than doubling in 2023.

Officials said the Cambodia deal has the potential to increase non-oil trade to $1 billion by 2030, up from $407 million in 2022.

In the first nine months of 2023 the UAE’s non-oil trade with Cambodia exceeded $300 million compared to the same period in 2022.

Cambodia’s prime minister Hun Sen witnessed the signing in Phnom Penh by the two countries' trade ministers, Dr Thani bin Ahmed Al Zeyoudi and Pan Sorasak — Cambodia’s prime minister Hun Sen witnessed the signing in Phnom Penh by the two countries’ trade ministers, Thani bin Ahmed Al Zeyoudi and Pan Sorasak

Under the deal, the UAE is expected to benefit from new export opportunities in machinery, oils and lubricants, and cars and automotive parts, while Cambodia aims to increase exports of grains, fruits, meats, processed foods, clothing and leather goods.

The agreement is expected to accelerate investment flows between the two countries in priority sectors including logistics and infrastructure, travel and tourism and renewable energy.

Al Zeyoudi said the Cambodia Cepa will help to fortify relations with the “increasingly important” Asean region, a political and economic union of 10 states in southeast Asia.

In addition to completed deals with Indonesia and Cambodia, Cepa negotiations are also under way with Thailand, Malaysia and Vietnam.

According to think tank Asia House, Gulf-Asean trade fell to a low of $67 billion in 2020 but recovered to $95 billion in 2021 before surging to $138 billion in 2022.

UAE-Asean trade was worth $67 billion in 2022, an increase of around 46 percent compared with the previous year.