Formal talks on the Cambodia-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) will likely be completed by 2023, and result in a deal far more beneficial for both countries than the bilateral free trade agreements (FTA) that the Kingdom has entered, according to a senior commerce ministry official.
Cambodian Minister of Commerce Pan Sorasak and UAE Minister of State for Foreign Trade Thani bin Ahmed al-Zeyoudi signed a declaration of the launch of formal negotiations for the CEPA in the Emirati capital Abu Dhabi on October 24, the commerce ministry confirmed in a statement.
A CEPA is a type of FTA 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 more specialised economic cooperation.
At the ceremony, Sorasak commented that the UAE is Cambodia’s top trading partner in the Middle East, accounting for about three-fifths of total trade with the region by value, and that the CEPA would support the development of trade relations between the two countries, the statement said.
Ministry of Commerce undersecretary of state and spokesman Penn Sovicheat told The Post on October 25 that the bilateral CEPA would liberalise trade to a greater level than Cambodia’s FTAs with China and South Korea.
The deal will also underline opportunities for collaboration in oil, mineral resources, meat production and agriculture, and other key areas, he said, noting that the UAE has signed CEPAs with India, Israel, and most recently, Indonesia.
He shared that the initial plan was for a more standard FTA between Cambodia and the UAE that by and large focuses on goods and services trade, investment and economic cooperation. However, more opportunities were identified after further deliberation, prompting the upgrade to a CEPA, he said.
He added that the Kingdom is still exploring the vast export potential for agricultural products, textile-related items, and general components to the UAE, and by extension, the entire Middle East.
“We hope that the agreement will inspire players from Middle Eastern countries to invest in Cambodian manufacturing for export back there. Entering UAE markets is like opening a gateway for exports to regional countries, due to all the agreements between them,” Sovicheat said.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng remarked that the CEPA would open up new markets for the Kingdom’s products and expand bilateral cooperation across the full spectrum of capabilities.
On top of the China and South Korea FTAs as well as the Regional Comprehensive Economic Partnership, the new deal will bring in even more UAE investors, and enable the Kingdom to gain technologies, methods and insights for the oil business, he claimed.
He added that a CCC working group also attended the October 24 ceremony, and took the occasion to network with the Emirati business community, highlighting investment and business opportunities between both countries, especially in agriculture and agro-industry; garments, travel goods and other industrial sectors; energy; finance; and construction.
According to the commerce ministry, trade between the two countries totalled $279 million in the first eight months of 2022, up 40 per cent year-on-year. Despite Covid-19, Cambodia-UAE trade was to the tune of $151.547 million in 2021, up 52.66 per cent over the $99.271 million logged in 2020.