In light of the negotiations for a Malaysia-EU Free Trade Agreement (MEUFTA) called by European Commission (EC) president Ursula von der Leyen, the two countries will focus on reaching out, building partnerships and creating new opportunities.
She pointed out that Europe and Malaysia share a commitment to a rules-based international order, economic openness, sustainable development and regional stability.
“As our third-largest trading partner in ASEAN and the current chair, Malaysia plays a central role in shaping the bloc’s direction,” she said, reaffirming Europe’s commitment to strengthening ties with both Malaysia and ASEAN as a whole.
“A free trade agreement between Europe and Malaysia would take our trade relationship to the next level. With trade between us already worth 45 billion euros (RM208.04 billion) annually, we will unlock even greater benefits for businesses and consumers, especially for industrial products,” von der Leyen added.
She also mentioned that by opening and establishing smooth trade, it will result in better choices and prices with less risk, as integrating and diversifying supply chains can strengthen economic security.
“We aim to build our partnership on robust commitments on labour rights and climate and environmental protection. Once concluded, this agreement will provide a platform of dialogue on issues the EU cares deeply about, including respect for human rights. We are showing that sustainability and free trade can and must go hand in hand,” she went on.
This could significantly benefit Malaysia’s key export sectors, particularly in high-value goods and natural resources, as expressed by AmBank Group chief economist Firdaos Rosli.
However, he cautioned that the main challenge lies in improving the business environment and addressing regulatory requirements rather than focusing solely on trade.
“As a member of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), Malaysia is also well-equipped to negotiate high-quality issues such as intellectual property rights and environment, which are of great interest to the EU,” Firdaos said.
Furthermore, according to a statement from the Prime Minister’s Office (PMO), the MEUFTA is expected to unlock immense benefits across multiple sectors of Malaysia’s economy while strengthening the global supply chain in critical sectors.
“It is poised to bolster exports from sectors such as electrical and electronics (E&E) products, palm oil and its derivatives as well as optical and scientific equipment to the EU market, among others.
“The MEUFTA will also catalyse significant investments from the EU in cutting-edge sectors such as green energy and advanced manufacturing, aligning with the industrial reform goals of the New Industrial Master Plan 2030,” the statement showed.
At the same time, Firdaos also stressed that securing a trade agreement with Malaysia is becoming crucial for the EU to maintain its market share and sustain growth.
“I think Malaysia should take a more offensive stance in attracting more investments from the EU in the renewed negotiations,” he opined, while also urging Malaysian businesses to actively prepare and enhance their capabilities to maximise the agreement’s benefits once it comes into effect.
Anwar Calls for Support in Climate Financing, Green Initiatives
Meanwhile, Malaysian Prime Minister Datuk Seri Anwar Ibrahim called for the EU to deepen its support for Southeast Asia through increased climate financing, green investments, technical assistance and capacity-building initiatives.
As the country assumes the ASEAN chairmanship, Anwar said Putrajaya has made sustainability as its core pillar of its role in 2025 and is committed to galvanising the region towards bold, collective action that safeguards our future without compromising our right to development and economic prosperity.
Acknowledging the disparities between developed and developing nations, the prime minister emphasised that equitable partnerships are essential for advancing the goals of the Paris Agreement and ensuring that vulnerable nations receive the necessary support for climate adaptation and mitigation measures.
“Partnerships are key to keeping the hopes of the Paris Agreement alive and Malaysia appreciates the EU’s ongoing support for Southeast Asia’s climate ambitions.
“Transitioning away from fossil fuels, developing a regional power grid, implementing carbon taxes, building community resilience to extreme weather events and conserving our rich biodiversity and natural carbon sinks.
“These are just some of Southeast Asia’s aspirations as we seek to punch above our weight for a cleaner future while ensuring that the benefits of development are available to all and protecting the most vulnerable segments of society,” Anwar said.
