KUALA LUMPUR: A European Union-Malaysia free trade agreement is expected to strengthen ASEAN’s economic integration and expand regional supply chains, according to EUROCHAM Malaysia.
Chief executive officer Karl Godderis said the renewed negotiations reflect strong preparation and commitment by both sides to deepen trade and investment links.
“Discussions are going better than initially expected, which is a reflection of both Malaysia and the EU being well-prepared,“ he said on Bernama TV’s The Nation programme.
Godderis said the FTA would open new opportunities for Malaysia to diversify its export markets while attracting greater European investment.
He cited Vietnam’s exports to the EU rising 60% within five years of its FTA taking effect as an example of tangible results from similar agreements.
Malaysia currently enjoys a trade surplus of 24 billion euros with the EU despite the bloc accounting for only 7.5% of Malaysia’s total trade compared to China’s 22%.
“There is a big opportunity to grow that number,“ Godderis said, adding that FTAs are frequently viewed through regional intra-trade benefits in ASEAN engagements.
Europe’s intra-trade within the EU itself stands at 60% of total trade, while ASEAN’s intra-trade is only about 25%.
“By having EU FTAs with multiple ASEAN countries, including Malaysia, Indonesia, Vietnam, Thailand and the Philippines, we can help expand regional supply chains and encourage more trade among ASEAN members,“ Godderis said.
He emphasised that the growing network of EU trade agreements across Southeast Asia would catalyse more regional production linkages.
This would particularly benefit industries such as electronics, machinery, medical devices and green technology. – Bernama
