KUALA LUMPUR: The first comprehensive Free Trade Agreement (FTA) between Malaysia and the United Kingdom (UK), through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will boost trade and investment relations between both countries.
Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the UK’s entry as a Group of Seven (G7) member and leading advocate of the rules-based trading system brings significant value to the CPTPP.
In his speech at the UK’s CPTPP countdown ceremony, Tengku Zafrul said the UK remains a strategic trading partner to Malaysia, with total trade reaching RM14 billion (US$3 billion) in the first 10 months of 2024.
“These numbers will improve, through increased Malaysian exports of sustainable palm oil, aerospace parts, oil and gas, renewable energy, environmental products, electrical and electronics and lifestyle products, and British exports of machinery, pharmaceuticals, chocolates and confectionaries and high-tech goods.
“Furthermore, UK exporters can also leverage the 16 FTAs Malaysia has ratified, including the Regional Comprehensive Economic Partnership (RCEP) and many others,” he said.
The UK is scheduled to enter the CPTPP on Dec 15, 2024.
Tengku Zafrul said the electrical and electronics sector would benefit from the FTA between Malaysia and the UK through the CPTPP.
He said British investors will appreciate Malaysia’s political stability and its strong rule of law, which supports a conducive landscape for investors seeking to establish their manufacturing or services hub in Asia.
Policies like the New Industrial Master Plan (NIMP) 2030, the National Energy Transition Roadmap (NETR), the National Semiconductor Strategy (NSS) and the Green Investment Strategy, are all aimed at attracting investments that would promote sustainable, equitable and inclusive growth.
“Besides, the Malaysian government is serious about the execution of its industrial and other structural reforms,” stressed Tengku Zafrul.
On Malaysia’s ASEAN chairmanship in 2025, Tengku Zafrul said it is important for UK businesses to invest and collaborate with neutral and non-aligned partners as ASEAN’s neutrality and centrality have brought about long-standing regional peace.
Malaysia strongly intends to strengthen its centrality and neutrality so that more investments and trade would flow into the region, he said.
Meanwhile, acting British High Commissioner David Wallace said the agreement would see 94 per cent of tariffs eliminated between the UK and Malaysia which would boost palm oil, cocoa and confectionery, cars and aerospace.
“We’re hoping this will strengthen our modern partnership and grow both of our economies,” he said.
With the UK joining CPTPP, Wallace said the combined gross domestic product (GDP) of CPTPP members has risen from over £9 trillion to £12 trillion (£1= RM5.64).
He said the UK will be the second-largest member behind Japan, increasing the GDP of the bloc by 25 per cent.
“Joining this existing trading group means that over 99 per cent of UK goods exports to CPTPP members are eligible for tariff-free trade and it means lower tariff on CPTPP exports to the UK,” he said.
