Brussels: The first round of negotiations for a comprehensive free trade agreement (FTA) between the European Union (EU) and Malaysia is set to begin in Brussels, Belgium, from June 30 to July 4. EU Ambassador to Malaysia, Rafael Daerr, confirmed the decision to move forward with these negotiations after EU’s chief negotiator, Christophe Kiener, met with Malaysian officials three weeks ago to finalize the modalities.
According to BERNAMA News Agency, Daerr emphasized the strategic importance of the Malaysia-European Union Free Trade Agreement (MEUFTA) in strengthening bilateral ties and exploring alternative trade partnerships, especially in light of the United States’ shift towards a more protectionist trade policy. Malaysia’s negotiating team will be led by Mastura Ahmad Mustafa, the deputy secretary-general (trade) at the Ministry of Investment, Trade and Industry (MITI).
The decision to restart FTA discussions was made after Prime Minister Datuk Seri Anwar Ibrahim’s meeting with European Commission President Ursula von der Leyen during Anwar’s official visit to Brussels in January. The European Commission, located in Brussels, is the sole EU institution responsible for tabling laws, including those related to FTAs.
The FTA negotiations will cover a broad range of areas, including trade and sustainability, digital trade, tariffs, sanitary and phytosanitary measures, and investment. Daerr stated that following this initial round, the lead negotiators will consult their respective stakeholders for further input.
Highlighting Washington’s protectionist stance and the imposition of tariffs affecting 168 countries, Daerr noted that goods facing high tariffs in the American market could now potentially find new opportunities in Europe. He expressed that the FTA would generate more business, production, consumption, and growth.
Daerr anticipates the second round of negotiations to occur in Kuala Lumpur in September. MITI Minister Tengku Datuk Seri Zafrul Abdul Aziz previously mentioned that the MEUFTA is expected to be finalized by 2026. Past negotiations for a Malaysia-EU FTA, initiated in 2010, stalled in 2012 due to issues related to palm oil procurement policies. However, Tengku Zafrul confirmed that these concerns have now been resolved.
The EU ranks as Malaysia’s fourth-largest trading partner, following China, Singapore, and the US, accounting for 9.5% of Malaysia’s total trade in goods in 2023. Bilateral trade in goods between the EU and Malaysia reached £44.7 billion in 2023, with EU imports from Malaysia at £29.1 billion and exports at £15.6 billion. Trade in services totaled nearly £11 billion in 2022.
In 2023, Malaysia was the EU’s third-largest trading partner within the ASEAN region, after Singapore and Vietnam. Daerr emphasized the potential benefits of the MEUFTA, drawing parallels with recent EU FTAs with Singapore and Vietnam, which have resulted in a 40% increase in trade.