KUALA LUMPUR (April 24): Malaysia is currently working on a free trade agreement (FTA) with the European Union (EU), according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, after initial negotiations between the two parties reached an impasse about 12 years ago.
“The EU-Malaysia FTA is being discussed at a working level. A scoping exercise is being done. If it is agreed on what areas we can work with, then only it is meaningful,” he told reporters after the presentation of the Ministry of Investment, Trade and Industry’s (Miti) first-quarter report card here on Wednesday.
“We are supportive, and we are working closely with the EU. It is just about timing, as the EU is having their parliamentary election right now,” Tengku Zafrul added.
Elections for the European Parliament will take place in June.
Negotiations between Malaysia and the EU for an FTA were formally launched on Oct 5, 2010, according to Miti's website. Eight rounds of negotiations were held between December 2010 and September 2012.
The negotiations reached an impasse in 2012, as both sides had exhausted their negotiating options at that time. Subsequently, it was agreed that negotiations would resume when a fresh mandate and/or flexibilities become available to both sides.
Besides the EU, Tengku Zafrul noted that Malaysia had also resumed talks for an FTA with South Korea, which he said will potentially increase the two countries’ trade and investment in emerging sectors, including supply chains, the digital economy, bioeconomy, and green hydrogen.
On top of that, the minister also revealed that the FTA with the United Arab Emirates, known as the Comprehensive Economic Partnership Agreement, will be finalised in June.
“This will be our first FTA with a Middle Eastern nation. In fact, it is not just an FTA, but a comprehensive economic partnership agreement which will cover digital, green and everything else. It is unprecedented,” he added.
Earlier, the minister reported that Malaysia had been making extensive use of the FTAs inked with external economies, with a free-on-board value of RM41.03 billion achieved during the first quarter of this year (1Q2024), compared with RM64.38 billion in the same period last year.
A total of 85,062 certificates of origin (COs) were issued during the period under review, up from 82,997 COs issued in 1Q2023.
The COs allow exporters to enjoy preferential treatment through lower or zero import duties.
Furthermore, Tengku Zafrul highlighted that the top three FTAs benefiting Malaysian exporters are the Asean Trade in Goods Agreement, Asean-China Free Trade Area, and Asean-Korea Free Trade Area.