BACKGROUND

• The Malaysia-EU FTA (MEUFTA) negotiation was formally launched on 5 October 2010.  A total of 8 rounds of negotiations were held between December 2010 and September 2012.

• The negotiations reached an impasse in 2012 as both sides had exhausted their negotiating options at that time.  Subsequently, it was agreed that negotiations will resume when a fresh mandate and/or flexibilities become available to both sides.

• Malaysia and the EU have also concluded the Agreement on Partnership and Cooperation (PCA) in December 2015.

SCOPE

MEUFTA covers 16 areas negotiated across 13 Working Groups.  The 16 areas are:

1. Market Access for Goods
2. Services
3. Investment (although there is a draft text tabled by the EU, no negotiations have taken place as the EU did not have the mandate to discuss investment protection until December 2012, by which time MEUFTA negotiations were already paused)
4. Rules of Origin (ROO)
5. Customs and Trade Facilitation (CTF)
6. Mutual Administrative Assistance (MAA)
7. Trade Remedies
8. Sanitary and Phyto-Sanitary (SPS) Measures
9. Technical Barriers to Trade (TBT)
10. Government Procurement (GP)
11. Intellectual Property Rights (IPR)
12. Competition
13. Sustainable Development (Labour and Environment)
14. Legal and Institutional Issues
15. Sectoral Annexes (Green Technology/Renewable Energy, Automotive, E&E and Pharmaceuticals)
16. Introductory, General and Institutional Matters

STATUS OF NEGOTIATIONS

• Malaysia and the EU are currently undertaking their own internal assessment in consultations with their stakeholders on the way forward for the resumption of the MEUFTA after a lapse of four years.

BENEFITS

• The EU is a significant market for Malaysia as it provides a viable access to penetrate into the strategic market of Euro zone.  The EU is also an important source of foreign direct investment and transfer of knowledge and technology.

• The EU was Malaysia’s third largest trading partner in 2016 after China and Singapore. In 2016, trade with the EU increased by 0.4% to reach RM149.1 billion.

• Malaysia’s exports to the EU grew 1.2% to RM79.8 billion. The EU accounted for a higher share of Malaysia’s total exports at 12.1% in 2016 compared with 10.1% in 2015. Germany, the Netherlands, the United Kingdom, France and Italy remained Malaysia’s top 5 export destinations in the region.

• The main driver for the increase in exports to the EU was E&E products, primarily parts and accessories for office machines as well as, computers and data processing equipment. Exports of E&E products to the EU increased by 10.4% or RM3.73 billion.

• Other exports that registered increases to the EU were rubber gloves, machinery, appliances and parts (pumps, compressors, fans, centrifuges and parts), transport equipment (aircraft parts), optical and scientific equipment (instruments and appliances used in medical, surgical, dental or veterinary sciences), manufactures of metal, petroleum products, apparel and clothing accessories as well as, iron and steel products.

• EU is one of Malaysia’s major sources of foreign investment. At present, there are more than 1,000 European companies that have invested in the manufacturing sector in Malaysia. Major names include Infineon Tech, Osram, Siemens, B. Braun and BASF and Phillips.

• To date, EU companies have implemented 1,512 manufacturing projects worth RM70.56 billion mainly in E&E, chemicals and chemical products, petroleum and petrochemical products, basic metal products and machinery and equipment.

• In addition, many prominent MNCs and large corporations from the EU have chosen Malaysia to establish their regional and global operations. These include renowned MNCs such as BASF, Eppendorf, Siemens, Arvato and Nordenia.

CONTACT US

Enquiries on MEUFTA can be submitted to the Coordinator of MEUFTA:

1. Mr. Augustino Jude
   DL : 03-6208 4721
   Email : augustino@miti.gov.my