Key facts
- Malaysia aims to sign a trade deal with the EU by the end of June 2027.
- Nearly 80% of negotiations for the Malaysia-EU Free Trade Agreement are complete.
- Palm oil and automotive sector issues remain unresolved in the trade talks.
- Major Malaysian palm oil producers accounting for 60% of crude palm oil output comply with EUDR.
- Malaysia's total trade with the EU was approximately $50 billion last year.
Malaysia aims to finalize a free trade agreement with the European Union by the end of June 2027, according to the nation's Investment, Trade and Industry Minister Johari Abdul Ghani. He stated on Tuesday that approximately 80% of the negotiations are complete, with the remaining discussions focusing on sensitive areas such as palm oil and the automotive sector.
Johari emphasized the importance of accessing open markets, noting that the US, China, and the EU together represent nearly 70% of the global economy. The US economy is valued at $32 trillion, China's at $19.2 trillion, and the EU's at about $21 trillion. Malaysia, as an open economy, seeks to maximize trade with these significant economic blocs.
Regarding the European Union Deforestation Regulation (EUDR), Johari clarified that compliance is not a "red line" for Malaysia. He indicated that major palm oil producers, responsible for about 60% of the country's 20 million tonnes annual crude palm oil output, are already adhering to the EUDR's requirements concerning deforestation, traceability, and forced labor. EU commissioner for international partnerships Jozef Sikela acknowledged Malaysia's efforts, stating that any postponement in the regulation's implementation was due to internal EU reasons rather than Malaysia's non-compliance.
Last year, Malaysia's total trade with the EU reached approximately $50 billion, with exports amounting to $30 billion and imports from the EU around $24 billion. The finalization of the Malaysia-EU Free Trade Agreement would mark Malaysia's 18th such accord.