Kuala Lumpur: The European Union (EU) is gearing up for the first round of negotiations to restart the Malaysia-European Union Free Trade Agreement (MEUFTA) before the summer or the latter half of 2025, according to European External Action Service managing director for Asia and the Pacific, Niclas Kvarnstr¶m. The EU and Malaysia are actively preparing internally for these discussions.
According to BERNAMA News Agency, the revival of Malaysia-EU trade negotiations holds notable significance amidst current geopolitical tensions that impact global trade and supply chains. The EU seeks to fortify trade partnerships with trusted nations that align on fundamental values and mutual interests, stated Kvarnstr¶m during an interview at the EU Delegation office. The managing director is on a two-day visit to Malaysia starting Monday.
The resumption of MEUFTA talks was announced by Prime Minister Datuk Seri Anwar Ibrahim and European Commission President Ursula von der Leyen in Brussels this January. Although discussions originally commenced in 2010, they were halted in 2012 due to Malaysia’s objections regarding the EU’s palm oil procurement policies, subsidies, and sustainability conditions. Malaysia had raised issues of discrimination concerning palm oil, focusing on allegations related to open burning and labor practices.
Kvarnstr¶m elaborated that both the EU and Malaysia are dedicated to a rules-based international order, economic openness, sustainable development, and regional stability. He emphasized that agreements from 2012 are now outdated, given the substantial changes in geopolitical dynamics, technology, innovation, value chains, and environmental challenges. Thus, starting afresh is imperative for both parties.
He further remarked on Malaysia’s significant economic progress towards becoming a high-income nation with an evolved economic profile. While still reliant on mineral and natural resources, Malaysia has developed a robust industrial base with innovative sectors.
In terms of trade statistics, Kvarnstr¶m highlighted that in 2023, the bilateral trade in goods between the EU and Malaysia amounted to 44.7 billion euros. The EU’s imports from Malaysia were valued at 29.1 billion euros, while exports to Malaysia reached 15.6 billion euros, resulting in a trade surplus of 13.5 billion euros for Malaysia. Additionally, trade in services was nearly 11 billion euros in 2022.
The EU also stands as Malaysia’s second-largest source of foreign direct investment, totaling 31.6 billion euros in 2023. Bilateral trade is predominantly centered on industrial products, particularly machinery and appliances, which constitute over 90 percent of trade flows. Specifically, machinery and appliances accounted for 62 percent of all EU imports from Malaysia and more than 46 percent of EU exports.