UAE-Cambodia Comprehensive Economic Partnership Agreement Comes Into Effect
Cambodia and the United Arab Emirates (UAE) signed a Comprehensive Economic Partnership Agreement (CEPA) trade partnership agreement in June 2023 but this has now come into effect in Q1 2024. There are hopes this will boost trade and investment by reducing tariffs on over 92 per cent of product lines, with the potential to double non-oil trade to US$1 billion by 2030.
Cambodia officially became the fifth country to trade with the UAE under the Comprehensive Economic Partnership Agreement (CEPA), which should provide investment and trade opportunities for the two countries, specifically in logistics and infrastructure, travel and tourism projects as well as renewable energy.
Cambodia’s former Minister of Foreign Affairs and International Cooperation H.E Prak Sokhonn and UAE Minister of State for Foreign Trade His Excellency Dr Thani bin Ahmed Al Zeyoudi signed the CEPA agreement which was witnessed by then Cambodian Prime Minister Hun Sen in 2023.
Dr. Thani bin Ahmed Al Zeyoudi, said, “The implementation of our Comprehensive Economic Partnership Agreement with Cambodia marks another important step forward in our foreign trade agenda, fortifying bilateral relations with a robust and agile partner in the increasingly important ASEAN region. This deal lays the foundations for a future-facing partnership that creates new opportunities, drives investment in priority sectors and accelerates 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.”
H.E Cham Nimol, the current Minister of Commerce of Cambodia, said this was part of its alignment with Cambodia’s Pentagonal Strategy Phase I, but to be fair the agreement was signed before the strategy was released when new Cambodian Prime Minister Hun Manet took office in 2023.
What Sectors Will Benefit From This CEPA?
Among the goods expected to see increased trade, the UAE will see export opportunities in machinery, oils and lubricants, and cars and automotive parts, while the Kingdom of Cambodia is expected to export grains, fruits, meats, processed foods, apparel, footwear and leather goods.
- The UAE invests USD $3+ million in Cambodia, while the Kingdom invests approximately USD $1 million in direct foreign investment in the UAE.
- The CEPA agreement aims to more than double non-oil bilateral trade between Cambodia and the UAE by 2031.
- CEPA hopes to boost trade from USD $407 million in 2022 to $1 billion.
- Metals and minerals are projected to account for 73% of UAE exports by 2030.
- The UAE is one of Cambodia’s top trading partners in the Arab world, accounting for 70% of its trade with the region in 2022.
- This CEPA includes provisions to support Small and Medium-sized Enterprises (SMEs) to expand their reach and offer access to new markets.
Dubai Customs had already announced changes in 2023 in anticipation of the CEPA coming into effect which was initially thought to be in Q4 2023. The agreement guarantees improved access for UAE products to the Cambodian market and covers 92% of customs tariff lines and over 93% of the value of non-oil trade.