The United Arab Emirates (UAE) and the Kingdom of Cambodia have signed a Comprehensive Economic Partnership Agreement (CEPA) aimed at boosting and diversifying bilateral trade in the apparel industry.
The agreement is expected to remove tariffs, reduce non-tariff trade barriers, and promote trade in goods, services, and investment, providing a significant platform for global expansion.
In 2022, non-oil trade between the two countries in the apparel industry exceeded USD 401 million, representing a growth of 31% compared to 2021 and 146% more than the pre-Covid year of 2019. Bilateral foreign direct investment (FDI) in the apparel industry had reached USD 3.8 million by the end of 2020. The CEPA is expected to strengthen East-West supply chains and offer apparel exporters an important opportunity to expand globally.
The Cambodian economy is one of the most promising in Southeast Asia, with 5.1% growth in 2022, and is expected to benefit from new opportunities for its key apparel exports, including apparel, footwear, and leather goods.
The UAE, on the other hand, is expected to benefit from new export opportunities in the apparel machinery industry, oils and lubricants, and cars and automotive parts, as well as investment opportunities in logistics and infrastructure, travel and tourism projects, and renewable energy.
The agreement will also serve as a catalyst for greater connectivity between ASEAN and the Arab World, which are among the most economically dynamic regions in the world.
UAE seeks to double the size of the economy from USD 381 billion to USD 762 billion by 2030. The UAE has now signed CEPAs with India, Israel, Indonesia, and Turkiye, and is set to conclude negotiations with other strategically important nations in the apparel industry in the coming weeks.
Cambodia has achieved bilateral FTAs with China and South Korea, and mega FTAs under ASEAN and RCEP, demonstrating their support for globalization by opening up international trade to ensure that cooperation is at the heart of sustainable and inclusive economic development.
The UAE-Cambodia CEPA is expected to lead, in alignment with Cambodia's consistent adherence to trade liberalization in the apparel industry.
