Twitter: @sahanasometimes
Phnom Penh (Cambodia): Over the past two decades, the Asia-Pacific region has undergone a significant transformation with China’s rise as a global powerhouse and the resulting response from the United States. This shift has presented considerable challenges for the countries of the Association of Southeast Asian Nations (ASEAN), which are strategically located and experiencing rapid development. As they navigate the complexities of an evolving international landscape dominated by the China-U.S. rivalry, ASEAN has actively sought support from alternative regional powers to address uncertainties associated with this competition.
In line with this trend, Cambodia and the United Arab Emirates (UAE) have solidified their economic partnership through the signing of a Comprehensive Economic Partnership Agreement (CEPA) on the 8th of this month. Thani Al Zeyoudi, the UAE’s minister for foreign trade, took to Twitter to announce that the newly signed agreement with Cambodia will effectively reduce or eliminate tariffs, creating a favorable environment for trade while also opening doors for strategic investments. Zeyoudi emphasized that the deal will “eliminate barriers to trade and create new avenues for strategic investment,” signaling the transformative potential of this partnership.
The non-oil trade between the UAE and Cambodia already amounted to $407 million in 2022, and both countries are eager to surpass the $1 billion mark within the next five years, according to Zeyoudi. This ambitious goal is expected to be achieved through increased exports from Cambodia, including grains, fruits, meats, clothing, and leather goods, while the UAE will see a rise in exports of machinery, oil, lubricants, and other related products.
Moreover, the agreement paves the way for exploring investment opportunities in various sectors such as logistics, infrastructure, travel, and renewable energy. The UAE ministry of Economy has expressed its commitment to actively pursue these avenues for mutual growth and development. The agreement signifies a strategic move to expand economic cooperation between the two nations, fostering trade expansion and encouraging investment collaborations.
Prime Minister Hun Sen highlighted the significance of this free trade deal, emphasizing the expanded market access it would provide for Cambodia in the UAE. Despite its smaller population, the UAE holds a prominent position as a global trade and logistics hub. Hun Sen expressed confidence that the agreement would attract UAE investors to establish factories in Cambodia, leading to the export of finished products back to the UAE with preferential tariffs. This partnership is expected to drive economic growth and strengthen the ties between Cambodia and the UAE.
Additionally, during the ongoing 55th Foreign Ministers Meeting of ASEAN in Cambodia, the UAE signed the Treaty of Amity and Cooperation in Southeast Asia (TAC). The TAC, a peace treaty established by the founding members of ASEAN, includes 10 member states: Indonesia, Thailand, Malaysia, Singapore, Brunei, Cambodia, Myanmar, Philippines, Vietnam, and Laos. This agreement solidifies the UAE’s commitment to promoting peace and cooperation in the Southeast Asian region, further enhancing its engagement with ASEAN.
The UAE is actively accelerating its negotiations on comprehensive economic partnership agreements (CEPA) with multiple Southeast Asian countries. By capitalizing on its early entry into emerging markets like ASEAN, the UAE aims to strengthen its bargaining power in discussions with China and major Western powers, surpassing regional competitors such as Saudi Arabia. Experts believe that the UAE’s engagement with ASEAN aligns with its broader strategic objectives to attain regional and global leadership as an Arab nation. In May, Malaysia, Thailand, and Vietnam agreed to initiate CEPA talks during a visit to the region by Zeyoudi, who recently returned to Phnom Penh to finalize a deal with Cambodia.
Since its establishment in 1971, the UAE has pursued economic diversification and global engagement. Recognizing the need to move beyond oil dependency, the UAE adopted an active foreign policy in the 1980s and 1990s, seeking to strengthen ties with countries beyond its immediate region. While initially focusing on building relationships with Western countries, the UAE also fostered connections with Asian nations, including those in ASEAN.
The UAE’s engagement with ASEAN gained momentum in the 1990s and early 2000s, resulting in significant growth in bilateral trade and investment between the UAE and ASEAN countries. Its strategic location as a gateway between East and West, coupled with its business-friendly environment, attracted ASEAN investors and facilitated trade.
Over the years, the UAE has established specific partnerships and collaborations with ASEAN countries. For instance, it signed a Comprehensive Economic Partnership Agreement with Indonesia in July 2020, aiming to enhance bilateral trade and investment.
The UAE has actively pursued diplomatic relations with ASEAN as a bloc, aspiring to become a sectoral dialogue partner. In August 2020, the UAE signed the Treaty of Amity and Cooperation with ASEAN, underscoring its commitment to broader diplomatic engagement and cooperation across various sectors.
Drawing upon its historical and political context, coupled with its strategic location in the Gulf region, the United Arab Emirates (UAE) has emerged as a significant force in regional affairs. This influence has been further reinforced through the UAE’s recent engagement in Comprehensive Economic Partnership Agreements (CEPAs) with key nations such as India, Indonesia, Israel, and Turkey. Building upon this momentum, the UAE is currently engaged in negotiations for over 10 additional CEPAs, solidifying its commitment to fostering global trade partnerships and expanding its reach across diverse markets.
