Kuala lumpur: Malaysia and the European Union (EU) have completed negotiations on five chapters of the Malaysia-European Union Free Trade Agreement (MEUFTA), with both sides targeting to finalise the pact by 2027. Investment, Trade and Industry Deputy Minister Sim Tze Tzin announced the progress following the fourth round of negotiations held in Kuala Lumpur from June 8 to 12, which concluded the chapters on Customs and Trade Facilitation, Trade Remedies, and Good Regulatory Practices.
According to BERNAMA News Agency, the transparency chapter was concluded during the second round of negotiations, and the small and medium enterprises chapter in the third round. The next round of negotiations is scheduled from September 21 to 25 in Brussels, Belgium. The announcement was made by Deputy Minister Sim Tze Tzin during his opening remarks at the Italy-Malaysia Business Mission, organized after Prime Minister Datuk Seri Anwar Ibrahim's visit to Italy last year at the invitation of Italian Prime Minister Giorgia Meloni.
Sim highlighted that the MEUFTA would significantly integrate Malaysia with the EU's single market, opening new opportunities in high-tech services, green energy, and digital trade. The agreement aims to strengthen industrial linkages and supply chains, particularly between Malaysia and Italy, fostering business opportunities for both economies.
On the trade front, Malaysia's total trade with Italy rose by 14.2% year-on-year to approximately RM17 billion (US$3.2 billion) in 2025, positioning Italy as Malaysia's fifth-largest trading partner in Europe. Malaysia's exports to Italy increased by 12.7% year-on-year, driven by products such as palm oil, iron and steel, electrical and electronics, and machinery. Imports from Italy included machinery, optical and scientific equipment, and chemical products.
To date, over 80 Italian manufacturing projects valued at US$442 million have been executed in Malaysia across various sectors, including aerospace and food processing. Sim emphasized that Italian companies prefer Malaysia for investments due to its comprehensive industrial ecosystem and established supply chains that support local production for the Southeast Asian market.
Deputy Minister Sim also noted the potential for stronger collaboration between Italy and Malaysia in the electrical and electronics sector, highlighting both countries' strong capabilities in machine manufacturing. He reaffirmed Malaysia's commitment to supporting high-value manufacturing investments through the New Investment Incentive Framework, which offers tax incentives for advanced manufacturing and semiconductor activities.
Sim concluded by stressing the equitable treatment of both local and foreign companies in receiving investment incentives, with a priority on advancing Malaysian industries up the value chain.