FTA With EU Crucial For Malaysia TO Become High Income Economy By 2020

From Samantha Tan BRUSSELS, Dec 6 (Bernama) -- Malaysia's free trade agreement (FTA) with the European Union (EU) is crucial for the country to achieve its goal of becoming a high-income economy by 2020, says a European Commission spokesman. A successful outcome of the Malaysia-EU FTA would also prompt other Asean countries to clinch similar pacts with Europe, the spokesman, requesting anonymity, said on Monday. He also said that the FTA would help financially-troubled EU economies recover from the debt crisis, as they can increase exports, to both Malaysia and Asean. Malaysia would serve as the gateway. To date, he said the EU was satisfied and happy with the progress of the FTA after five rounds of negotiations, since talks with Malaysia were launched on Sept 10 last year. The sixth round is scheduled from Feb 8-12 next year in Malaysia. The joint objective is to conclude these negotiations by 2012. The spokesman was speaking at a trade seminar for journalists from Southeast Asia here, organised by the EU's Directorates-General for Trade, from Dec 5-7. Malaysia is the EU's second largest trading partner in Asean after Singapore, largely by virtue of its gateway position in the Southeast Asian region. It is also due to growing domestic demand, spurred by Malaysia's significant economic development and growth. Over the last five years, trade in goods between the EU and Malaysia has been expanding steadily, reaching an average annual growth rate of about 3.2 per cent. Between 2009 and 2010, EU exports to Malaysia had increased by 24 per cent. The EU, comprising 27 member states, is the world's largest economy with a 26 per cent share of global gross domestic product. Its 500 million inhabitants make it the world's most lucrative market. The spokesman said the Malaysia-EU FTA could help the troubled members to recover from the debt crisis by collecting income from export, and on another note, also make the industries in the EU more competitive. He said the positive progress on the Malaysia-EU FTA talks would encourage other Asean countries to initiate such similar negotiations. He added that the EU is keen to engage in FTAs with four nations, namely, Vietnam, Thailand, the Philippines and Indonesia. The spokesman said the aims to launch two FTA talks from among the four Asean countries. -- BERNAMA