'EU-Malaysia FTA Will Be Inked By Year-End'

KUALA LUMPUR, Jan 14 (Bernama) -- The European Union (EU) is optimistic that its free trade agreement (FTA) with Malaysia will be inked by year-end, as per the timeline set by Prime Minister Najib Tun Razak, during his visit to Brussels, Belgium in 2010. Ambassador and Head of the Delegation of the EU to Malaysia, Vincent Piket said the two governments must work together in all areas pertaining to the agreement, and across all economic sectors to realise the timeline. He added that the FTA upon enforcement, would increase Malaysia's gross domestic product by eight per cent in 2020. "The conclusion of the FTA would be a landmark step in the fostering of bilateral trade between the two partners and deepen economic integration. "By year-end, both governments will be setting up a joint-cooperation framework to bring the relationship to a much higher level," he told reporters after delivering a talk on, "Whither Malaysia-EU Relations: A Perspective", organised by the National Press Club (NPC) here, on Friday. Piket said an FTA would create extra growth as closing borders, reduces growth, while opening it, promotes growth. On trade this year, he said it was on a growth trend as has been the case for the past several years, and did not expect anything to change this. "Trade is on an uptrend. For the first nine months of 2011, it recorded a growth of between six-eight per cent, compared to the corresponding period of 2010. "However, I cannot reveal any figures as the official data, has yet to be furnished," he added. In 2010, total trade between the EU and Malaysia stood at 31.9 billion euros (1 euro = RM3.96). Exports from the EU to Malaysia was at 11.2 billion euros, while Malaysia's exports to the EU stood at 20.7 billion euros. When asked about the EU's stand on the restriction imposed on Malaysian palm oil in respect of the issue of sustainability, Piket said it is likely to be resolved soon. "This is a huge topic. The dispute is between the scientists from our member countries and the Malaysian Palm Oil Board and the Malaysian Palm Oil Council. "However, both sides have now taken initiatives to resolve the issue. Both parties have always been in contact and have taken a clear stand that sustainability is very vital to creating biofuels," he added. Piket also disclosed that over 95 per cent of Malaysian palm oil exports to the EU did not face any restriction, other than an import duty of three per cent. "Only five per cent of the exports face restrictions as it is used to create renewable energy. But I stress that our (EU) policies are not discriminatory, especially where, the palm oil issue is concerned," he said. In a related development, Piket said both the EU and Malaysia have consented to conclude negotiations on the Voluntary Partnership Agreement (VPA) soon. "This is in order to facilitate Malaysian timber companies meeting legality requirements in the EU. "The VPA will create important benefits for Malaysia's timber industry as well as create a green lane for legally-approved timber into the EU market," he added. The EU is considered a huge market for Malaysian timber with over one billion euros spent yearly by the grouping's member states in importing it. "Upon conclusion of negotiations, the timber trade will definitely grow. The timber industry is a very important one for both the EU and Malaysia," Piket said. -- BERNAMA Malaysia