Cambodia Investment Review

Cambodia and UAE Strike Landmark Trade Deal: Comprehensive Economic Partnership Agreement Set to Double Bilateral Trade to $1B

Cambodia and UAE Strike Landmark Trade Deal: Comprehensive Economic Partnership Agreement Set to Double Bilateral Trade to $1B

Cambodia investment Review

Cambodia and the United Arab Emirates (UAE) have formalized a significant trade partnership that is set to bolster their economic relations. A Comprehensive Economic Partnership Agreement (CEPA) was signed in Cambodia’s capital, Phnom Penh, solidifying a commitment to more than double their bilateral trade from $407 million recorded in 2022 to $1 billion in the coming years.

The historic agreement was signed by the UAE’s Minister of State for Foreign Trade, Dr. Thani Al Zeyoudi, and Cambodia’s Minister of Commerce, Pan Sorasak, in the presence of Cambodia’s Prime Minister Hun Sen. Before Cambodia, the UAE signed CEPAs with India, Indonesia, Israel and Turkey. It has more than 10 other CEPAs in the works.

Read more: Cambodia Should Accelerate Trade Reforms To Address The Challenges Its LDC Graduation Will Bring

“The UAE-Cambodia CEPA is a new milestone in our foreign trade agenda that strengthens our growing role in the east-west trade corridor,” said Dr. Al Zeyoudi. He added that this strategic move will not only bolster UAE’s objective of doubling non-oil foreign trade by 2031, but also “expand our presence in the rapidly growing economies of South-East Asia, opening new doors for exporters to reach millions of consumers.”

In essence, the CEPA is set to reduce or eliminate customs duties, remove unnecessary trade barriers, and create a conducive environment for investment. Furthermore, it intends to open market access for service exports and create more opportunities for businesses to establish partnerships.

Private sector set to benefit

One such business looking to utilize this strengthened trade agreement is the Prince Holding Group (PHG). The company recently participated in the 2nd Cambodia-UAE Business Forum, an event co-organized by the Ministry of Commerce Cambodia and the Cambodia Chamber of Commerce (CCC). The forum played a pivotal role in promoting Cambodia’s economic growth, highlighting investment opportunities, and strengthening partnerships between Cambodia and the UAE.

According to its Chief Communications Officer, Mr. Gabriel Tan, the Group remains committed to building a better life for Cambodia by supporting and participating in platforms such as this to showcase the vast investment opportunities in Cambodia.

Prime Minister Hun Sen applauding as Cambodia and the United Arab Emirates signed the Comprehensive Economic Partnership Agreement accord at the Peace Palace in Phnom Penh.

During the event, PHG representatives engaged in meetings with influential stakeholders, such as His Excellency Dr. Thani bin Ahmed Al Zeyoudi, the Minister of State for Foreign Trade of the UAE. The group’s strong presence and active involvement in the forum were a testament to its commitment to drive economic growth and establish new partnerships.

However, Cambodia’s progress has its set of challenges. It recently met the graduation criteria from the list of least developed countries (LDC) for the first time in 2021, with plans to fully graduate by 2027. While this is a significant milestone, it also implies the loss of certain trade benefits, including duty-free status and favorable “rules of origin.”

Cambodia accelerating trade reforms

To overcome these hurdles, Cambodia is recommended to expand its participation in free trade agreements. As regional trade pacts continue to unfold, negotiating additional trade agreements could help Cambodia maintain and enhance its market access.

As Cambodia sets its sights on navigating the potential challenges associated with LDC graduation, the new CEPA with the UAE presents an important step toward attracting more investments, diversifying trade, and establishing a strong, future-proof economy.

Just recently, Canopy Sands Development, showcased its 934-hectare development, the Bay of Lights, at the Annual Investment Meeting (AIM) 2023 Congress in Abu Dhabi.

One such initiative is a significant step towards the firm’s mission of attracting global capital flows and global financial institutions to Cambodia, to pave the way for Cambodia’s vision to thrive as the next financial hub for Southeast Asia.

Read more: Canopy Sands Development Presents Bay of Lights at Annual Investment Meeting 2023: A Step Towards Becoming Cambodia’s Next Financial Hub

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