Malaysia’s trade with EU rockets to RM180b in 2021

by S BIRRUNTHA / pic source: Tengku Zafrul’s FB

MALAYSIA’S total trade with the European Union (EU) grew by 26% to US$43.5 billion (RM180.2 billion) in 2021.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said bilateral trade between Malaysia and the EU rebounded last year, despite the effects of the pandemic, and the EU remains an important trading partner to the country.

He added that Malaysia offers unparalleled advantages for businesses and investors, and acts not just as a gateway to the region, but to markets globally.

With that, the minister said Malaysia also welcomes initiatives by the European Commission to engage the Indo-Pacific region in establishing a more inclusive, multi-pronged and robust partnership between the EU and the region, through the EU Strategy for Cooperation in the Indo-Pacific.

“The strategic framework will act as a catalyst to revive the economies in the region.

“Furthermore, this will strengthen the Asean market which lies at the crossroads of global economic interactions, while serving as a major gateway for businesses to enter the Indo-Pacific markets,” he said in his keynote address at the EU-Asean Business Council (EU-ABC) AGM Gala Dinner in collaboration with Eurocham Malaysia yesterday.

He spoke on behalf of Prime Minister Datuk Seri Ismail Sabri Yaakob.

On the bilateral front, Tengku Zafrul said Malaysia welcomes the European Commission’s potential resumption of long-suspended negotiations of the Malaysia-EU Free Trade Agreement (FTA), and the government is looking forward to further discussions on its possible resumption.

He noted that undoubtedly, the FTA will unlock more opportunities for Malaysian and EU businesses.

“The unprecedented disruption to supply chains has laid bare the vulnerabilities of our current trading practices. Therein, Malaysia is committed to continuously improve and ensure our supply chains remain intact and resilient.

“Hence, Malaysia looks forward to engaging the EU more closely in the priority areas outlined in the EU Indo-Pacific Strategy, particularly on sustainable and inclusive prosperity,” he added.

In this regard, the minister said to date, Malaysia has signed 16 FTAs and implemented 15 of them, the latest one being the Regional Comprehensive Economic Partnership (RCEP) agreement, which entered into force in Malaysia on March 18, 2022.

He noted that this officially made the country a party to the world’s largest trading bloc covering one third of global GDP, or almost 30% of the global population.

He also emphasised that RCEP has the potential to unlock new markets and increase trade intensity and economic integration among member countries as well as ease the supply chain in the region.

Given this enormous potential, Tengku Zafrul invited the partners from Eurocham and EU-ABC to leverage Malaysia’s participation in RCEP by solidifying their investment and footprint in the country.

He said Malaysia will continue to foster a robust economic ecosystem that is driven by progressive trade and investment policies.

With regard to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, he noted that the government is steadfast in its commitment to ratify it by the end of this year, with steady progress made thus far on this front.

Meanwhile, on national investment aspirations, Tengku Zafrul was optimistic that Malaysia’s reformed investment policies and initiatives will encourage greater synergy in deepening Malaysia-EU relations, particularly in expanding green and sustainable investments in the country.

He added that the National Investment Aspirations (NIA), anchored by five key pillars, will ensure that investments deliver accelerated and holistic national growth, by way of increasing economic complexity; creating high-value job opportunities; extending domestic linkages; developing new and existing clusters; as well as improving inclusivity.

Additionally, he said the NIA will position Malaysia as a potential carbon trading hub in the region with the rollout of carbon pricing mechanisms and sector-specific Environmental, Social and Governance and climate-risk policy measures. These will focus on five key strategic sectors, namely electrical and electronics, the digital economy, pharmaceuticals, aerospace and chemicals.

Moving forward, the minister underlined that Malaysia is committed towards implementing all possible means for a rapid economic recovery, through carefully charted national plans and policies including Budget 2022, the 12th Malaysia Plan, National Investment Aspirations and MyDigital.