EU Confident Of Progress In Concluding FTA Talks With Malaysia

KUALA LUMPUR, April 21 (Bernama) -- The European Union (EU) is confident of progress in meeting its target of concluding negotiations with Malaysia on a free trade agreement (FTA) by next year.

The head of EU delegation to Malaysia, Vincent Piket, said the FTA would drive additional gross domestic product (GDP) growth for the Malaysian economy.

"Negotiations are now in progress and we are confident of working out an agreement for both sides," he said at the launch of the "EU-Malaysia Chamber of Commerce and Industry (EUMCCI) Trade Issues and Recommendations for 2011" which outlines the key proposals needed to improve business, investment relations and opportunities between the EU and Malaysia.

He said the conclusion of the FTA would be a landmark step in the fostering of bilateral trade between the two partners and would deepen economic integraton.

Government procurement policy, he said, was one of the issues on the FTA negotiations.

"In services, Malaysia is not a major trading partner as yet, but opportunities are increasing due to its liberalisation policies. These opportunities should further advance with the conclusion of an FTA," Piket said.

He said Malaysia also needed a more holistic approach in terms of policies on liberalisation to attract investors to set up their business for the long term.

Meanwhile, Federation of Malaysian Manufacturers president Tan Sri Mustafa Mansur said an FTA with the EU would enhance opportunities for expanding and widening trading relations between the two parties.

The base of current trading relationship was shallow and narrow, confining to a narrow range of goods namely on electronics and machinery, he said.

"Close to 66 per cent of Malaysian exports to the EU and 51 per cent of imports from the EU consist of electrical and electronic products and machinery, appliances and parts," he added.

Malaysia is the EU's second largest trading partner within Asean after Singapore with bilateral trade in goods reaching 31.9 billion euro in 2010. Malaysia is also the EU's 22nd largest trading partner in goods overall.

Mustapa said Malaysia's FTA with the EU would also open up vast opportunities for Malaysian companies to expand their business into the European region.

EUMCCI chairman David Jones said that when successfully completed, the FTA would become the long-term framework for economic relations in which tariffs on all trade in goods could ultimately be removed.

Some of the key recommendations put forward by EUMCCI in the 2011 Trade Issues and Recommendations book include reviewing the equity conditions particularly those relating to foreign ownership.

Among other recommendations is the liberalisation of services.

International Trade and Industry Ministry's senior director (Asia-Pacific Economic Cooperation) Datuk N. Vasudevan said while liberalisation was important, it should be done progressively.

"The challenge for us now is to have the workforce that meets the job requirement for new technology as many of the investment that comes to this country are from the high technology investment," he said.

-- BERNAMA

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