‘FTA with EU will put Malaysia on a par with neighbours’
18 Mar 2024
The revival of the proposed Malaysia-European Union (EU) Free Trade Agreement (FTA) could boost investments and opportunities for Malaysian businesses, say experts.
Former deputy international trade and industry minister Ong Kian Ming said it was the right time to revive the Malaysia-EU FTA as it would allow the country to be on a par with regional competitors.
“Vietnam has signed an FTA with the EU and Indonesia is negotiating an FTA with the EU,” he told the New Straits Times.
He said this was important given the many opportunities and challenges to attract more foreign direct investments (FDI) into Malaysia.
He was commenting on Prime Minister Datuk Seri Anwar Ibrahim’s call for the restart of talks on the long-stalled Malay-sia-EU FTA.
Anwar said the FTA would allow Europe to capitalise on Malaysia as a gateway to Asia and leverage the country’s open market policies.
Ong said an FTA with the EU would allow Malaysia to have more “substantiative” negotiations in “challenging” areas, including the palm oil sector.
A number of sectors would benefit from an FTA, including in high-end electrical and electronics, palm oil, automotive and electric vehicles, logistics and financial services, he said.
“The restart of the Malaysia-EU FTA talks would provide a boost of confidence to those who have invested in Malaysia and to those who are interested in investing in Malaysia.”
Irish chamber of commerce Malaysia chairman Donal Crotty described Anwar’s push as “excellent” as the EU had been pushing for a restart of talks, which ended in 2012.
He said an FTA with the EU would boost Malaysia’s credibility and reputation as an FDI partner.
“Europe is the second largest collective economy in the world making up 29.8 per cent of global gross domestic product, and is thus a massive market opportunity for Malaysian products.”
Trade between Malaysia and EU stands at about €50.3 billion up to 2022.
“Economic results of FTAs over the past 30 years suggest a mean increase of trade of 4.5 per cent per annum.”
He said the FTA would be good in the context of environment, social and governance (ESG) in trade and foreign relations.
“The EU is a primary influencer where ESG regulations are concerned,” he said, adding that this aligned with Malaysia’s own ESG aspirations.
“This alignment may enable a significant advantage as part of any FTA agreement.”
Centre for Market Education chief executive officer Dr Carmelo Ferlito also said the time was right for a Malaysia-EU FTA.
“Given the weaker economic scenario in China and geopolitical tensions in the region, Malaysia can serve as a gateway for businesses in Southeast Asia.
“Obviously, this needs to be paired with the right set of business-friendly regulations in place,” he said, adding that this included issues related to finance, labour, licensing and immigration.
Source: NST
