Cambodia’s Economic Diversification Gets a Boost with UAE Partnership Agreement

The Comprehensive Economic Partnership Agreement between the United Arab Emirates and the Kingdom of Cambodia has officially come into effect.

The agreement aims to increase trade flows and provide opportunities for strategic investments and stimulate economic diversification in both countries by removing or reducing customs duties on more than 92% of goods and products, eliminating unnecessary trade barriers, and improving access to service exports.

The comprehensive economic partnership agreement between the UAE and Cambodia, which is the fifth to be implemented, aims to increase non-oil trade value between the two countries to one billion dollars annually by 2030.

The agreement builds on the growing bilateral relations that have resulted in the non-oil trade between the UAE and Cambodia surpassing $300 million in the first nine months of 2023, which is equivalent to the figure recorded during the same period of 2022, and an increase of 30.5% compared to the same period of 2021.

Dr. Thani bin Ahmed Al Ziyoudi, Minister of State for Foreign Trade, said:

“The implementation of the Comprehensive Economic Partnership Agreement with Cambodia represents an important step forward in our foreign trade agenda and strengthens bilateral relations with a strong partner in the growing ASEAN region.”

And he added:

“This agreement will establish a partnership with promising future prospects that contributes to providing new opportunities and driving the wheel of investments in priority sectors, enhancing global economic security. By solidifying trade routes between the East and the West, we look forward to exploring the benefits resulting from open rule-based trade, which is a system adopted by our two friendly countries.”

In her turn, Cambodian Minister of Commerce, Cham Prasidh, said:

“The Comprehensive Economic Partnership Agreement between the UAE and Cambodia is unique for both friendly countries and will strengthen relations and cooperation between the two nations and enhance the growing links between the Arab world and the Association of Southeast Asian Nations (ASEAN), as both regions are currently among the most dynamic and vibrant in the world. Therefore, there are multiple opportunities for mutual growth that need to be explored, as the UAE can serve as a platform for Cambodia’s exports to the Arab market. Similarly, Cambodia can serve as a base for UAE exports to the ASEAN region.”

She confirmed that the Comprehensive Economic Partnership Agreement between Cambodia and the United Arab Emirates will serve as another major driving force for mutual economic growth in both countries, enhancing supply chains, stimulating trade flows, promoting mutual investment, and thus leading to economic integration for achieving comprehensive, flexible, and sustainable growth for both nations and the surrounding region, which aligns with Cambodia’s five-year strategy for economic diversification and enhancing competition.

Cambodia, one of the key emerging economies in Southeast Asia, experienced an economic growth of 5.2% in 2022, following a yearly growth rate of 7.7% between 1998 and 2019.

The United Arab Emirates will benefit from new export opportunities through this agreement in the fields of machinery, oils and lubricants, cars and spare parts. Meanwhile, the main exports that are expected to thrive in Cambodia include grains, fruits, meat, processed foods, clothing, shoes, and leather goods.

According to feasibility studies, the agreement will accelerate investment flows between the two countries in priority sectors, including logistics, infrastructure, travel, tourism, and renewable energy. It should be noted that the value of foreign direct investments reached $3.8 million for both sides by the end of 2020, while total Emirati investments in Cambodia amounted to approximately $3 million by the end of the first half of 2022.

The Comprehensive Economic Partnership Agreement program represents a key element within the UAE’s new strategy for foreign trade, through which it aims to build stronger and more integrated trade relations with the most dynamic markets worldwide.

It is noted that the Comprehensive Economic Partnership Agreement between the United Arab Emirates and Cambodia is the fifth to officially enter into force, while procedures are ongoing for the entry of more similar agreements that the UAE has concluded with other countries, in preparation for their implementation soon.