Cambodia Sees Booming Trade With UAE, Charts Path to Diversification
In a testament to strengthening economic ties between Southeast Asia and the Middle East, Cambodia and the United Arab Emirates (UAE) have witnessed a surge in trade during the first ten months of 2024. Bilateral trade reached US$75 million, marking a 7% increase compared to the same period in 2023. This growth is partially attributed to the implementation of the CAM-UAE CEPA Comprehensive Economic Partnership Agreement, which came into effect earlier this year.
A Mutually Beneficial Partnership
The CAM-UAE CEPA agreement is playing a pivotal role in fostering stronger bilateral relations and unlocking new avenues for economic growth. It goes beyond traditional trade, aiming to promote services, attract investments, and enhance the value of Cambodian product exports to both the UAE and neighboring regions.
Cambodia is reaping the benefits of preferential tariffs on a wide array of key exports, including bags, shoes, clothing, textiles, bicycles, solar panels, electrical appliances, electric cars, rubber, rice, cassava, cashew nuts, pepper, coffee beans, vegetables, fruits, canned goods, and various processed agricultural products.
Furthermore, the agreement opens doors for Cambodian businesses to expand their commercial service offerings in the UAE market. This includes opportunities in professional and business services, construction and engineering services, and environmental services.
Trade Flows and Expanding Markets
Cambodia’s key exports to the UAE primarily consist of clothing, shoes, bags, vehicles and parts, and rubber products, highlighting the nation’s diverse manufacturing capabilities. In return, Cambodia imports petroleum, bitumen, tobacco, plastic products, machinery and electrical equipment, ready-made animal food, and furniture from the UAE, reflecting the diverse nature of its consumption needs.
This flourishing trade relationship comes at a crucial time for Cambodia as it seeks to diversify its export markets and reduce reliance on traditional trade partners. With the US imposing high general import tariffs, and the potential impact on Cambodia’s economy as its largest export market, diversification becomes paramount.
Cambodia views the UAE as a gateway to the wider Middle East, a region with tremendous growth potential and rapidly expanding economies. Expanding into this market not only diversifies Cambodia’s export destinations but also opens doors to investment in key industries that will drive its long-term economic growth.
Looking Ahead: A Bright Future
The CAM-UAE CEPA agreement is poised to play a catalytic role in accelerating Cambodia’s economic expansion and paving the way for deeper and more comprehensive international cooperation. The agreement not only fosters stronger ties between Cambodia and the UAE but also underscores the growing importance of Southeast Asia in the evolving global trade landscape.
How has the CAM-UAE CEPA specifically impacted Cambodia’s agricultural exports, particularly in terms of market access and product diversification?
## Cambodia Sees Booming Trade With UAE, Charts Path to Diversification
**Interviewer:** Joining us today is [Guest Name], an expert on Southeast Asian economies. Welcome to the show!
**Guest:** Thank you for having me!
**Interviewer:** We’re discussing the burgeoning trade relationship between Cambodia and the United Arab Emirates. Trade has surged 7% in the first ten months of this year, reaching US$75 million. What’s driving this growth?
**Guest:** This growth can be largely attributed to the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) which came into effect earlier this year. [[1](https://aric.adb.org/fta/cambodia-united-arab-emirates-comprehensive-partnership-agreement)]. This agreement goes beyond simple tariff reductions, aiming to foster deeper economic ties, including investment, services, and trade.
**Interviewer:** You mentioned preferential tariffs. What kind of Cambodian products are benefiting most from this agreement?
**Guest:** The agreement covers a wide range of Cambodian exports, encompassing everything from garments and textiles to agricultural products like rice and cashew nuts. [[1](https://aric.adb.org/fta/cambodia-united-arab-emirates-comprehensive-partnership-agreement)].
**Interviewer:** Cambodia is well-known for its agricultural sector. Are there any specific examples of agricultural products seeing a boom due to this partnership?
**Guest:** Absolutely. We’ve already witnessed Cambodia exporting its first shipment of milled rice to the UAE in January of this year. [[2](https://aric.adb.org/fta/cambodia-united-arab-emirates-comprehensive-partnership-agreement)]. This signifies the potential for wider agricultural exports to the UAE market.
**Interviewer:** What does this burgeoning trade relationship mean for Cambodia’s economy going forward?
**Guest:** This partnership has the potential to significantly diversify Cambodia’s economy. By tapping into the UAE market, Cambodia can reduce its reliance on traditional trade partners and access a new and growing source of demand for its goods and services.
**Interviewer:** Looking ahead, what can we expect from this partnership between Cambodia and the UAE?
**Guest:** I believe we can anticipate continued growth in bilateral trade and investment. The CAM-UAE CEPA opens doors for Cambodian businesses to access the UAE market, and for UAE companies to invest in Cambodia’s growing economy. This partnership stands as a model of economic cooperation between Southeast Asia and the Middle East, and its success will likely inspire similar agreements in the region.
