Kuala Lumpur: Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz today confirmed a Bernama report that Malaysia and oil-rich Gulf Cooperation Council (GCC) countries will sign a Free Trade Agreement (FTA) soon. Tengku Zafrul said today that both parties are working on arrangements for the official launch of the FTA negotiations and that a joint declaration of intent is expected to be announced soon.
According to BERNAMA News Agency, negotiations for a FTA between Malaysia-GCC countries are expected to start on May 27, 2025. The minister said that during his visit to the GCC office in Saudi Arabia last week, he had talked to the Secretary General of GCC, Jasem Mohamed AlBudaiwi, about expediting the process to complete the agreement within one year. Malaysia has prior experience in dealing with a GCC country, having recently completed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) in a record 10 months.
The GCC, established by an agreement concluded on May 25, 1981, is a regional political and economic alliance whose member states include Saudi Arabia, UAE, Qatar, Oman, Kuwait, and Bahrain. Tengku Zafrul added that Malaysia is aiming for a win-win framework that delivers benefits to both sides from the spillover on trade and investment when the pact is signed. While talks are still in their early stages, several key sectors have already been identified as having strong potential.
For Malaysian exporters, sectors like semiconductors and electrical and electronics (E and E) are being considered. Traditional sectors where GCC has a strong presence, such as chemicals, petrochemicals, oil, and gas, are also on the agenda. Emerging industries, including the halal economy, digital economy, renewable energy (RE), and artificial intelligence (AI), are being considered for collaboration.
Tengku Zafrul mentioned that Malaysia is in discussions with some GCC countries for sharing its experience in the semiconductor sector. He highlighted renewable energy as a promising area for collaboration, with GCC countries making significant investments in the sector. Malaysia aims to meet the net-zero emissions target by 2050, and collaboration with GCC investors and energy companies is seen as vital. Two major energy companies from the UAE and Saudi Arabia have publicly expressed interest in investing in Malaysia’s renewable energy sector.
When asked about the potential trade value of the future FTA, Tengku Zafrul noted it is too early to estimate, emphasizing the need to first agree on sectors and terms before conducting an analysis to estimate potential trade and investment flows. Malaysia’s role as the host of the 46th ASEAN Summit and two pivotal high-level engagements, namely the 2nd ASEAN-GCC Summit and the inaugural ASEAN-GCC-China Summit, is highlighted as a strategic platform to advance regional and inter-regional cooperation.
As ASEAN chair, Malaysia is positioned to act as a bridge between the regional bloc and the GCC. Tengku Zafrul emphasized leveraging Malaysia’s chairmanship to strengthen ties between ASEAN member states and the GCC, highlighting the importance of the ASEAN-GCC summit and the Economic summit for ASEAN-GCC. These platforms play a crucial role in enhancing connectivity in businesses, digital, and infrastructure cooperation, especially in today’s challenging geopolitical and geoeconomic landscape. The collaboration is seen as timely for ASEAN and GCC countries to assess each other’s markets and investments.