EU Aims To Finalise Free Trade Agreement With Malaysia By 2027 – EU Envoy

By Kisho Kumari Sucedaram

KUALA LUMPUR, Oct 24 (Bernama) -- The European Union (EU), the world’s largest trading bloc, is aiming to conclude the long-awaited free trade agreement (FTA) with Malaysia by 2027.

It would mark a major step towards strengthening economic ties between the EU and Malaysia, EU Ambassador to ASEAN Sujiro Seam said today.

FTA talks first started in 2010 but stalled after seven rounds in 2012 due to Malaysia’s reservations over the EU’s palm oil procurement policies, subsidies and sustainability clauses.

However, Prime Minister Datuk Seri Anwar Ibrahim and European Commission President Ursula von der Leyen announced that negotiations would resume during Anwar’s working visit to Brussels last year.

Seam also said the EU was pursuing a stronger economic partnership with several ASEAN member states, with ongoing FTA negotiations involving Malaysia, Thailand and the Philippines.

This also follows the successful conclusion of the Comprehensive Economic Partnership Agreement (CEPA) with Indonesia in September this year after nearly a decade of negotiations.

“The ambition which was displayed by Commissioner for Trade and Economic Security Maroš Šefčovič - who is the EU’s chief trade negotiator - is to conclude the negotiations by 2027,” he told Bernama ahead of the 47th ASEAN Summit and Related Summits next week.

The meetings will also include a summit between the EU and ASEAN, which is a dialogue partner of the Southeast Asian grouping.

The EU currently has free trade agreements with Singapore and Vietnam, and the upcoming deal with Indonesia would make it the third with an ASEAN member.

In 2024, bilateral trade between Malaysia and the EU reached RM218.9 billion, with exports totalling RM115.8 billion and imports RM103.1 billion.

Malaysia’s main exports to the EU include electrical and electronic products, manufactured goods, palm oil and related products, processed foods, and optical and scientific equipment.

Seam said that if negotiations with Malaysia, Thailand and the Philippines are successfully concluded by 2027, the bloc would have a pretty good coverage of ASEAN member states.

This is in line with the long-term ambition of ASEAN and the EU to establish a region-to-region FTA.

However, Seam said that both blocs’ leaders had agreed in 2022 that the region-to-region FTA would be a long-term objective.

For now, the EU is focused on bilateral FTAs as “building blocks” towards that broader goal.

Moreover, Seam said 2027 will also mark the 50th anniversary of the ASEAN-EU Dialogue Partnership, which is a milestone that both sides hope to commemorate with significant progress in their economic and strategic relations.

“This opportunity offered by the Malaysian chairmanship of ASEAN this year is a very good year for us to engage with ASEAN at the leaders’ level,” he said.

He added that the EU, under the new leadership of European Council President Antonio Costa, is looking forward to strengthening cooperation with ASEAN as a trustworthy and reliable partner at a time when there is a shifting political landscape.

“We have already manifested to our ASEAN partners that we would like to organise a 50th anniversary commemorative summit (and) the perfect deliverable for this occasion would be to upgrade our existing strategic partnership into a comprehensive strategic partnership,” he said.

Elaborating on the areas of cooperation between both blocs, Seam said EU and ASEAN will continue to work on three key areas of cooperation identified by leaders in 2022, namely the digital economy, green transition and resilient value chains.

“On the digital economy, we are waiting for the outcomes and the conclusion of the ASEAN Digital Economy Framework Agreement (DEFA), which would give us a basis to further engage with ASEAN.

“We are aware that with the current shifting positions on trade, there is a potential to reshape value chains; and this is a topic we want to work on with ASEAN,” he added.

He stressed that these three areas remain very valid priorities for ASEAN-EU cooperation as both sides navigate an evolving global economic landscape.

Seam also reiterated that the EU’s engagement with ASEAN is part of a long-term plan to enhance connectivity and sustainable growth across both regions.

-- BERNAMA