By Durratul Ain Ahmad Fuad
KUALA LUMPUR, May 19 (Bernama) — The first round of negotiations for a new and comprehensive free trade agreement (FTA) between the European Union (EU) and Malaysia will commence in Brussels, Belgium, from June 30 to July 4 this year.
EU Ambassador to Malaysia, Rafael Daerr, said the decision to proceed with the negotiations was finalised when EU’s chief negotiator, Christophe Kiener, met Malaysian officials here three weeks ago to undertake stocktaking and agree to the modalities for negotiations.
“A Malaysia-European Union Free Trade Agreement (MEUFTA) is increasingly important and timely to strengthen bilateral ties and explore alternative trade partnerships in light of the United States’ (US) shift towards a more protectionist trade policy,” he told Bernama in an interview recently.
Daerr noted that the Malaysian negotiating team to Brussels would be led by Mastura Ahmad Mustafa, the deputy secretary-general (trade) at the Ministry of Investment, Trade and Industry (MITI).
The crucial decision to kick-start talks for a new FTA was made when Prime Minister Datuk Seri Anwar Ibrahim met European Commission (EC) President Ursula von der Leyen and announced the resumption of negotiations during Anwar’s official visit to Brussels in January this year.
The EC, based in the Belgian capital of Brussels, is the sole EU institution tabling laws, including those related to FTAs.
Daerr said the FTA negotiations would cover a wide range of chapters or sectors, including trade and sustainability, digital trade, tariffs, sanitary and phytosanitary (SPS) measures, as well as investment.
“After this initial round, the lead negotiators on both sides will return to consult their respective stakeholders for further input,” said Daerr, who was appointed EU Ambassador to Malaysia last October.
Elaborating on Washington’s move to adopt a more protectionist stance and imposing debilitating tariffs on 168 countries, he said that: “Clearly, we would have preferred none of this to have happened.”
The additional interest for an FTA was also because goods which recorded a decline in sales and were made less attractive to the American market due to high tariffs could now be redirected and sold in Europe and vice versa (in Malaysia).
“Still, it would have been worth it to do the FTA and trade more among each other as that would generate more business, production, consumption and growth,” he said.
Daerr expects the second round of negotiations to take place in Kuala Lumpur in September.
MITI Minister Tengku Datuk Seri Zafrul Abdul Aziz had said earlier in January that the MEUFTA was expected to be concluded in 2026.
Negotiations for an earlier FTA between the EU and Malaysia were launched in 2010 but stalled after seven rounds in 2012 following Putrajaya’s reservations over EU’s palm oil procurement policies, subsidies and sustainability clauses.
Tengku Zafrul had also emphasised that concerns surrounding palm oil have been resolved by both parties and that it was no longer an issue in FTA negotiations.
The EU is the fourth-largest trading partner of Malaysia (after China, Singapore, and the US), accounting for 9.5 per cent of the country’s total trade in goods in 2023.
Bilateral trade in goods between the two countries equalled €44.7 billion (€1=RM4.81) in 2023.
EU goods imports from Malaysia stood at €29.1 billion in 2023, while EU goods exports reached €15.6 billion last year.
Trade in services amounted to almost €11 billion in 2022.
In 2023, Malaysia was the EU’s third-largest trading partner within the ASEAN region (after Singapore and Vietnam).
"We already have a bridge between EU and Malaysia based on the existing trade, but now with the FTA, we want to make the bridge wider," said Daerr.
Citing that the MEUFTA would be mutually beneficial, he noted that recent FTAs signed by the EU with Singapore and Vietnam have led to a 40 per cent increase in trade between the parties involved.
-- BERNAMA
