EU-Malaysia FTA to Strengthen ASEAN Integration, Regional Supply Chains -- EUROCHAM

KUALA LUMPUR, Oct 7 (Bernama) -- A European Union (EU)-Malaysia free trade agreement (FTA) is expected to strengthen ASEAN’s economic integration and expand regional supply chains, according to EUROCHAM Malaysia.

Its 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 “Diplomatic Dispatch” programme Tuesday.

Godderis said the FTA would open new opportunities for Malaysia to diversify its export markets while attracting greater European investment, while similar agreements had delivered tangible results elsewhere.

For instance, Vietnam’s exports to the EU rose 60 per cent within five years of its FTA taking effect, he said.

Godderis noted that Malaysia had already enjoyed a trade surplus of 24 billion euros with the EU, despite the bloc accounting for only 7.5 per cent of Malaysia’s total trade compared with China’s 22 per cent.

“There is a big opportunity to grow that number,” he said, adding that an FTA is frequently viewed through the lens of regional intra-trade benefits in engagements with ASEAN countries.

In Europe, 60 per cent of total trade is within the EU itself, whereas ASEAN’s intra-trade is only about 25 per cent.

“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, particularly in industries such as electronics, machinery, medical devices and green technology.

-- BERNAMA