Abu Dhabi: The Malaysia-UAE Comprehensive Economic Partnership Agreement (MY-UAE CEPA) signed between Malaysia and the United Arab Emirates on Tuesday aims to bolster the Islamic economy alongside promoting bilateral trade.

According to BERNAMA News Agency, the agreement marks Malaysia’s first free trade agreement with a Gulf Cooperation Council (GCC) country, unlocking potential for further collaborations with other GCC members. Minister of Investment, Trade and Industry, Tengku Datuk Seri Zafrul Abdul Aziz, highlighted that the Malaysian Cabinet has sanctioned the initiation of negotiations for a broader FTA with the GCC, anticipated to commence in May or June.

The GCC includes Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia, in addition to the UAE. The MY-UAE CEPA was witnessed by Malaysian Prime Minister Datuk Seri Anwar Ibrahim and UAE President Sheikh Mohamed bin Zayed Al Nahyan during the signing ceremony at the Abu Dhabi National Exhibition Centre (ADNEC) as part of the Abu Dhabi Sustainability Week
(ADSW) 2025.

Malaysia was represented by Tengku Zafrul, while the UAE’s representation was led by the Minister of State for Foreign Trade, Dr. Thani Ahmed Al Zeyoudi. The agreement is projected to enhance bilateral trade by at least 60% within five years. It is Malaysia’s 17th FTA and notably its first to address the green and digital economies, positioning these sectors as strategic priorities.

Tengku Zafrul emphasized the importance of incorporating sectors such as semiconductors, artificial intelligence, and renewable energy within the CEPA framework. In 2024, bilateral trade between Malaysia and the UAE reached RM39.53 billion, reflecting an 8.6% year-on-year growth. The UAE remains Malaysia’s second-largest trading partner in the Middle East, with trade amounting to RM39.63 billion in 2023. Malaysia ranks as the UAE’s fourth-largest trading partner among ASEAN countries and 32nd globally.