Malaysia and the United Arab Emirates (UAE) are close to finalizing a free trade agreement, with Malaysia’s trade minister stating that it should be completed by June.
In an interview in Abu Dhabi, Malaysian Trade Minister Tengku Zafrul Aziz mentioned that the two countries were in the final stages of discussions and that the agreement could enhance Malaysia’s position as a hub for UAE investments in Asia.
Last year, Malaysia and the UAE agreed to start negotiations on a Comprehensive Economic Partnership Agreement (CEPA), which aims to strengthen ties with key partners worldwide. The UAE has already signed similar agreements with India, Israel, Indonesia, Turkey, and Cambodia in recent years.
The economic relationship between Malaysia and the UAE has been growing steadily, with bilateral trade reaching $2.2 billion in the first half of 2023, excluding oil imports. UAE is Malaysia’s second-largest trade partner in the Middle East and its 17th largest globally, accounting for 32% of Malaysia’s trade with Arab countries.
If the CEPA is finalized, Malaysia hopes to attract more UAE investments in sectors such as energy, electric vehicles, and microchips. The Mubadala Investment Company, an Abu Dhabi sovereign wealth fund, is already involved in Malaysia’s energy sector through its subsidiary Mubadala Energy.
Prime Minister Anwar Ibrahim has been working to strengthen economic relations with the Middle East, including ties with Saudi Arabia. Malaysia also started negotiations for a free trade pact with the Gulf Cooperation Council, although progress has been slow and the discussions are currently stalled.