Cambodia and the United Arab Emirates (UAE) are slated to sign a declaration of the launch of formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA) on October 24, paving the way for a boost in bilateral trade and investment.
CEPAs are free trade agreements (FTA) that are generally designed for a more holistic coverage beyond just commodities, and can contain provisions for services, investments, dispute resolution, intellectual property rights, government procurement, and specialised economic cooperation.
Cambodian Minister of Commerce Pan Sorasak and UAE Minister of State for Foreign Trade Thani bin Ahmed al-Zeyoudi are set to sign the declaration at a ceremony in the Emirati capital Abu Dhabi, attended by senior officials and representatives of relevant ministries, institutions and the private sectors of both countries.
A Cambodia Chamber of Commerce (CCC) delegation led by its president Kith Meng is set to visit Abu Dhabi from October 23-27 and attend the ceremony, the Kingdom’s apex trade body said in an October 22 statement.
In collaboration with the Cambodian commerce ministry, the UAE economy ministry, and the UAE Federation of the Chambers of Commerce and Industry (FCCI), the CCC will also hold a joint business forum, with leaders of ministries, institutions, and more than 70 countries of both countries.
“[Meng] will address the forum, highlighting business and investment opportunities, the economic situation and potential sectors of Cambodia to promote trade, investment, economic cooperation, digital sector development, and small- and medium-sized enterprises, as well as review the possibility of joint projects for Cambodia-UAE cooperation,” the CCC said.
The statement confirmed that the CCC delegation would meet a number of UAE companies on October 25.
CCC director-general Nguon Meng Tech lauded the beginning of CEPA talks as another step for Cambodia towards a promising market in the Arab world, claiming that the UAE is “globally one of the fastest growing economies”.
A potential trade deal with the UAE would make Cambodian goods more marketable there, especially agricultural products, he said, adding that the Kingdom could entice Emirati investors to commit their money to food production, namely the halal segment, for export to the broader Arab market.
Halal food production is that where every aspect of the ingredients, materials, procurement, processes, methodologies and facilities are deemed permissible under Islamic Law, as defined in the religion’s holy book, the Quran.
Meng Tech expects CEPA talks to be relatively fast, and result in the entry of substantial volumes of Cambodian merchandise on the UAE market. He proposed fisheries and agricultural products as contenders for top Cambodian exports to the UAE.
The CCC “will strive to facilitate things and provide valuable information on Cambodia’ resources to a wider audience, to attract more investors from Arab countries”, he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia (RAC), suggested that, as a first step, the Kingdom capitalise on agricultural and food product exports to the UAE, which he argued are in high demand due to the seven-emirate union’s desert environment.
“After that, Cambodia must strive to diversify its market, to meet any and all demand from abroad,” he said.
Speaking at a July 4 video conference, the commerce minister revealed that the UAE was the 26th largest market for Cambodian exports.
Sorasak listed notable exports to the UAE as textiles, footwear, travel goods, bicycles and milled rice; and imports as petroleum products, animal feed, fertilisers, tobacco and ceramics.
Despite Covid-19, Cambodia-UAE trade was to the tune of $151.547 million in 2020, up 52.66 per cent over the $99.271 million logged in 2020, according to the commerce ministry
Last year, the Kingdom’s exports to the UAE clocked in at $52.116 million, up by 18.93 per cent from $43.822 million in 2020, and imports passed $99.431 million, up by 79.32 per cent from $55.449 million.
However, Cambodia’s trade deficit with the UAE expanded by almost 306.95 per cent to $47.315 million in 2021, from $11.627 million a year earlier.