Malaysia's EU Free Trade Talks Set to Boost Local Business Access

In the midst of major changes in the global trade environment, Malaysia's free trade agreement negotiations with the EU are timed to help local businesses obtain better access there, according to economists. They believe that the resumption of negotiations for the Malaysia-European Union Free Trade Agreement (MEUFTA) may have been prompted by the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The participation of both the UK and Malaysia in the trade deal, according to Dr. Azmi Hassan, a senior scholar at the Nusantara Academy for Strategic Research, pushed the EU to recognize the importance of MEUFTA, particularly in light of the Donald Trump-led U.S. administration.

"However, the threat is always there (for the EU), not only on the economy but also geopolitics. The MEUFTA is a win-win situation for both Malaysia and the EU," he said.

According to Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, the MEUFTA guarantees that Malaysian companies will continue to expand their supply chain diversification and improve their access to EU markets. At a time when the deglobalization tendency is becoming more widespread, it is unquestionably a positive step. It might result in a more favorable trading environment, particularly for goods linked to palm oil.

"Globalisation would need to be revived but it has to benefit all parties. Perhaps, something good would come out from the trade negotiation between the EU and Malaysia which would result in a win-win outcome," Afzanizam said.