KUALA LUMPUR: The first comprehensive Free Trade Agreement (FTA) between Malaysia and the United Kingdom (UK), facilitated by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is expected to enhance trade and investment relationships between the two countries. Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz highlighted the significance of the UK’s inclusion as a Group of Seven (G7) member and a proponent of a rules-based trading system, which adds considerable value to the CPTPP.

According to BERNAMA News Agency, at the UK’s CPTPP countdown ceremony, Tengku Zafrul emphasized the UK’s role as a strategic trading partner to Malaysia, with bilateral trade reaching RM14 billion (US$3 billion) in the first ten months of 2024. He projected that these figures would improve with increased Malaysian exports of sustainable palm oil, aerospace parts, oil and gas, renewable energy, environmental products, electrical and electronics, and lifestyle products. Br
itish exports are anticipated to grow in machinery, pharmaceuticals, chocolates and confectioneries, and high-tech goods. Moreover, UK exporters can benefit from the 16 FTAs Malaysia has ratified, including the Regional Comprehensive Economic Partnership (RCEP).

The UK is scheduled to join the CPTPP on December 15, 2024. Tengku Zafrul noted that the electrical and electronics sector would particularly benefit from the FTA, as British investors may find Malaysia’s political stability and strong rule of law attractive for establishing manufacturing or service hubs in Asia. The Malaysian government’s policies, such as the New Industrial Master Plan (NIMP) 2030, the National Energy Transition Roadmap (NETR), the National Semiconductor Strategy (NSS), and the Green Investment Strategy, are designed to attract investments promoting sustainable and equitable growth.

Tengku Zafrul also addressed Malaysia’s upcoming ASEAN chairmanship in 2025, emphasizing the importance of UK businesses investing and collaborating w
ith neutral partners, as ASEAN’s neutrality and centrality contribute to regional peace. He stated Malaysia’s commitment to strengthening its centrality and neutrality to attract more investments and trade to the region.

Meanwhile, acting British High Commissioner David Wallace indicated that the agreement would result in the elimination of 94 percent of tariffs between the UK and Malaysia, benefiting sectors such as palm oil, cocoa and confectionery, automobiles, and aerospace. Wallace expressed hopes that this would enhance the modern partnership between the two nations and stimulate economic growth. With the UK’s entry into the CPTPP, the combined gross domestic product (GDP) of its members is expected to rise from over £9 trillion to £12 trillion, positioning the UK as the second-largest member behind Japan and increasing the bloc’s GDP by 25 percent. Wallace concluded that joining the trading group would render over 99 percent of UK goods exports to CPTPP members eligible for tariff-free trade and lower
tariffs on CPTPP exports to the UK.