Malaysia - Korea
BACKGROUND
The Malaysia - Korea Free Trade Agreement (MKFTA) negotiations was formally launched on 11 July 2019. A total of 3 rounds of negotiations were held between July 2019 and September 2019.
The negotiations reached an impasse after 3 rounds of negotiations in 2019 due to divergences in a number of areas in the negotiations.
In 2024, Malaysia and Korea have re-engaged in talks on MKFTA. Both Parties agreed to resume MKFTA negotiations with an expanded scope to include new areas such as Digital Economy, Green Economy and Bioeconomy.
The resumption of the FTA is timely given the magnitude of Malaysia-Korea existing bilateral relations trade growth between the two countries. It is envisage that the FTA would provide further impetus to enhance economic linkages between both parties as well as industry demand.
SCOPE
13 Working Groups have been set up to cover the agreed areas of MKFTA:
Trade in Goods
Trade in Services
Investment
Rules of Origin (ROO)
Customs Procedures & Trade Facilitation
Trade Remedies
Sanitary and Phyto-Sanitary (SPS)
Technical Barriers to Trade (TBT)
Legal and Institutional Issues
Digital Economy
Green Economy
Bioeconomy
Economic Cooperation
STATUS OF NEGOTIATIONS
Negotiations between Republic of Korea and Malaysia are still on-going.
The 4th Round of MKFTA negotiations to be held on 20th- 23th August 2024 in Kuala Lumpur.
BENEFITS
The newly announced resumption of the Malaysia- Republic of Korea (ROK) Free Trade Agreement on 26 March 2024 is set to increase bilateral trade and investment between the two countries.
In 2023, total trade with ROK amounted to RM111.1 billion (USD24.3 billion). ROK was Malaysia's 12th largest global trading partner. Meanwhile, among ASEAN member states, Malaysia was ROK's 3rd largest trading partner after Singapore and Vietnam.
Malaysia’s major exports to ROK were E&E products, LNG, petroleum products, manufactures of metal and optical & scientific equipment; while Malaysia’s major imports from the ROK were petroleum products, E&E products, chemical and chemical products, machinery, equipment and parts, as well as iron and steel products.
In terms of investment, the ROK has been one of Malaysia’s top sources of Foreign Investment for the manufacturing sector. As of December 2023, a total of 390 projects worth USD10.7 billion (RM40 billion) have been implemented, generating 48,374 jobs. Most of these investments were in chemical and chemical products, basic metal products, electrical and electronics, petroleum products and food manufacturing products.
Among the notable ROK companies with implemented projects in Malaysia are Samsung Group, OCIM, Lotte Group, SK Nexilis and IMM Technology.
The MKFTA is expected to bolster existing trade and investment relations and enhance strategic cooperation between Malaysia and ROK in new emerging sectors such as supply chains, digital economy, bioeconomy, green hydrogen and industrial alleviation.
CONTACT US
Enquiries on MKFTA can be submitted to the Coordinator of MKFTA:
Ministry of Investment, Trade and Industry
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Last updated : 11-10-2024
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