Negotiations on the long-stalled Malaysia-European Union Free Trade Agreement are being revived as both sides finalise preparations, with trade and geopolitical stability key priorities.
The European Union (EU) expects the first round of negotiations on resuming the Malaysia-European Union Free Trade Agreement (MEUFTA) to take place before summer or in the second half of 2025, says Niclas Kvarnström, the European External Action Service’s managing director for Asia and the Pacific.
He said both sides, the EU and Malaysia, are currently finalising internal preparations.
“The relaunch of Malaysia-EU trade negotiations is of particular importance in the current context of geopolitical tensions that disrupt trade flows and supply chains globally.
“The EU aims to develop trade partnerships with trusted partners with whom it shares fundamental values and common interests,” he told Bernama in an interview at the EU Delegation office here today.
In January, Prime Minister Anwar Ibrahim and European Commission president Ursula von der Leyen announced the resumption of MEUFTA negotiations during a meeting in Brussels.
Talks initially began in 2010, but stalled in 2012 due to Malaysia’s concerns over the EU’s palm oil procurement policies, subsidies, and sustainability clauses.
Expanding on the negotiations, Kvarnström said the EU and Malaysia shared a commitment to rules-based international order, economic openness, sustainable development, and regional stability.
However, he noted that prior agreements from 2012 are now obsolete.
“The world has changed significantly – not only from a geopolitical perspective but also in terms of technology, innovation, value chains, and environmental challenges.
“We (the EU and Malaysia) must therefore start again from scratch,” said Kvarnström.
Kvarnström acknowledged Malaysia’s economic transformation, stating that the country is on track to becoming a high-income nation with a diversified industrial base.
While Malaysia continues to rely on mineral and natural resources, it has also built a strong industrial base, including innovative sectors, he added.
On EU-Malaysia trade, Kvarnström said bilateral trade in goods totalled €44.7 billion in 2023.
The EU imported €29.1 billion worth of goods from Malaysia, while it exported €15.6 billion worth of goods to Malaysia, leaving Malaysia with a €13.5 billion trade surplus.
Trade in services was valued at nearly €11 billion in 2022. The EU was Malaysia’s second-largest source of foreign direct investment (FDI), with €31.6 billion in 2023.
Bilateral trade is dominated by industrial products, particularly machinery and appliances, which account for over 90% of trade flows. Machinery and appliances alone made up 62% of all EU imports from Malaysia and over 46% of EU exports.
Source: FMT
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
