KUALA LUMPUR: Outgoing European Union (EU) Ambassador to Malaysia Michalis Rokas has expressed confidence that the decision to restart negotiations on the stalled Malaysia-EU Free Trade Agreement (MEUFTA) is imminent.
"Having started the stock-taking exercise last year, the decision to restart talks on MEUFTA may take, at the maximum, a couple of months," said Rokas, who will take up his new posting in North Macedonia on Sept 1, 2024, after a four-year stint in Malaysia.
Negotiations for the free trade agreement (FTA) began in October 2010, with eight rounds held until September 2012, but stalled following Malaysia's reservations over palm oil, procurement policies, subsidies and EU's sustainability clauses.
Rokas said EU-Malaysia trade ties are significant while Europe's 27-member grouping is currently a vital source of foreign direct investment "despite the fact we don't have a free trade agreement."
"This, together with both European and Malaysian manufacturers and their respective business sectors wanting an agreement, makes a compelling case to restart negotiations for the stalled Malaysia-EU FTA," he told Bernama here.
It was Prime Minister Datuk Seri Anwar Ibrahim who breathed new life into the stalled MEUFTA talks after leading a successful trade and investment mission to Germany in March this year, when he said Malaysia had finally agreed to rekindle discussions on the trade pact to strengthen bilateral relations and regional integration further.
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Rokas said "there is a huge untapped potential and it (MEUFTA) is something that throughout my four years I have tried to bring back and restart negotiations on."
Not only is there an almost unanimous call for it by EU businesses operating in Malaysia, EU industry and the European Chamber of Commerce, but more importantly, it is a call from Malaysian businesses that operate here, including the Federation of Malaysian Manufacturers (FMM).
"If we restart, we can conclude rapidly. Let's be serious about it as nobody has time to waste and that there are a lot of challenges globally," he said.
He admitted there are undoubtedly touchy and sensitive issues between Malaysia and the EU, "but trust me, countries which negotiated FTAs with the EU saw the benefits at the end of the talks and the resulting FTAs were transformative for their own economies."
He cited that even Vietnam, a socialist republic with a one-party system led by the Communist Party, recorded a one-third increase in the volume and value of trade following its FTA with the EU.
"I foresee that Malaysia's volume and trade value with the EU could even be higher as the FTA will unleash the potential we both have.
"At the end of the day everything is flexible and not set in stone," he said.
According to EU data, bilateral trade with the EU totalled 44.7 billion euros (RM218.14 billion) in 2023, making it Malaysia's fourth-largest trading partner after China, Singapore, and the United States.
Trade between the EU and Malaysia is dominated by industrial products, machinery and appliances.
Besides machinery and appliances, the EU mainly imports animal and vegetable fats and oils including palm oil, chemical products and optical and photographic instruments, and exports chemical products.
Rokas said Malaysia always remains a very attractive country to invest in for EU companies given its location, highly developed infrastructure, and skilled labour force. "Morever, it is not very expensive."
The EU's internal market, being the biggest in the world comprising 450 million consumers, is extremely beneficial in terms of market access for Malaysian businesses.
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MEUFTA would also serve as a structured framework to solidify and benefit both economies amid global geopolitical tensions and economic volatility.
"It (MEUFTA) is a structured agreement that will make sure that even if there are more wars or more problems, you can count on the EU and we can count on Malaysia. I think it is a no-brainer that we do our utmost to improve our trading and investment conditions," he said.
Touching on palm oil, Rokas said that "it is an important commodity for us, with the EU being the third largest export destination for Malaysia after China and India."
"There has never been a ban on palm oil and there will never be such a ban," he said, dismissing news reports and media speculation to the contrary.
Other potential areas for further cooperation via an FTA include manufacturing, semiconductors, electrical appliances, commodities, services as well as sustainable industries.
Among major EU companies in Malaysia are Siemens, Braun, Airbus, Infineon, AT&S, Stellantis, Osram, Unilever, Royal Shell, Royal Dutch and Total Energy.
"We have conveyed the clear wish from the EU to resume negotiations to the Malaysian government and Investment, Trade and Industry Ministry (Miti). So now the ball is in Malaysia's court and we're awaiting Miti to respond to us," he said.
"We are in the search for new trusted partnerships around the world and we are looking very much forward to be a close partner throughout Malaysia's ASEAN 2025 chairmanship," he added.
Elsewhere in Asean, Rokas said, the EU concluded an FTA with Singapore in 2019 and Vietnam in 2020, and is likely to conclude with Indonesia by end-2024, "while we have two new enthusiastic partners in Thailand and the Philippines with whom we have started negotiating."
According to him, Malaysia is the only major economy that has not been recently negotiating an FTA with the EU.
"This is a very volatile world. Malaysia is a pocket of stability and it's a no-brainer that the EU will do its utmost best to improve (bilateral) trading and investment conditions," he said. – BERNAMA