Malaysia and the United Arab Emirates (UAE) are on the cusp of finalizing a free commerce settlement and may have it squared away by June, Malaysia’s commerce minister stated yesterday.
In an interview with Reuters in Abu Dhabi, Malaysian Commerce Minister Tengku Zafrul Aziz stated that the 2 sides have been “within the final spherical of discussions,” including that the deal may assist Malaysia change into a hub for UAE investments in Asia.
Final Could, Malaysia and the UAE agreed to begin negotiating a Complete Financial Partnership Settlement (CEPA), a type of free trade deal that “goals to deepen ties with strategic companions around the globe.” The UAE signed its first CEPA with India in early 2022, and has since signed agreements with Israel (Could 2022), Indonesia (July 2022), Turkey (March 2023), and Cambodia (June 2023).
The financial relationship between Malaysia and the UAE isn’t large, however has grown appreciably lately. Bilateral commerce came to $2.2 billion in the course of the first half of 2023, unique of oil imports. In a statement last year, UAE Commerce Minister Thani Al Zeyoudi stated that the nation accounted for 32 p.c of Malaysia’s commerce with Arab international locations, making it Malaysia’s second-largest commerce accomplice within the Center East and its Seventeenth-largest globally. The connection can be marked by appreciable quantities of funding. In his assertion, Zeyoudi stated the UAE and Malaysia Malaysian investments within the UAE stand at $150 million, and UAE investments in Malaysia stand at $220 million, he stated.
If and when a CEPA is signed, Malaysia hopes that it’ll open the best way to additional UAE investments in varied sectors of the nation’s financial system, together with in power, electrical autos, and microchips, Reuters reported. It famous that the Mubadala Funding Firm, one in every of Abu Dhabi’s three sovereign wealth funds, is already an investor in Malaysia, together with in the energy sector. By way of its subsidiary Mubadala Vitality, the agency operates and holds a majority stake within the Pegaga gasoline subject off the coast of Sarawak, which started producing gas in 2022.
The upcoming CEPA displays Malaysia’s rising financial linkages with the Center East, notably the rich and more and more dynamic economies of the Gulf. Since taking workplace in late 2022, Prime Minister Anwar Ibrahim has pledged to strengthen relations with the area, and to determine Malaysia as its financial bridgehead within the fast-growing Asia-Pacific. This has additionally concerned efforts to improve ties with Saudi Arabia, which had been harmed by the 1MDB corruption scandal. (Former Prime Minister Najib Razak stated {that a} “Saudi Arabian prince” had deposited $100 million into his private checking account, resulting in assaults on the nation from main politicians, together with then Prime Minister Mahathir Mohamad.)
Forward of his first state visit to Saudi Arabia in March of final yr, Anwar said that he was “dedicated to elevating the brotherly relations with the Kingdom to the next stage, particularly in commerce, funding, schooling, and tradition in addition to exploring new potential areas of cooperation.”
Malaysia has additionally launched negotiations for a free commerce pact with the Gulf Cooperation Council, which along with the UAE, contains Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman as members, however progress on this has been sluggish and the talks now appear to be on hold.
