Brussels, 06/10/2010 (Agence Europe) - On Tuesday 5 October, on the sidelines of the 8th ASEM Summit, European Commission President José Manuel Barroso and Malaysian Prime Minister Najib Tun Razak launched negotiations on a free trade agreement between the EU and Malaysia. The trade pact will cover customs duties and non-tariff barriers, and pledges on public procurement, competition and sustainable development. This will be Malaysia's first experience of having commitments on sustainable development and public contracts included in a bilateral trade agreement. In a press release, the European Commission says that the agreement would provide a significant window of opportunity for translating the ongoing liberalisation process for services in Malaysia into major new market access opportunities for EU businesses. European Trade Commissioner Karel De Gucht said he expected the agreement to “provide Malaysia with quality investment from Europe and open new market opportunities for Malaysian and European businesses”. Malaysia is the EU's second largest trading partner in ASEAN, after Singapore, (its 22nd largest overall). Trade in goods was worth €24.4 billion in 2009, and in services €4.5 billion in 2008. Currently there are no preferential arrangements between the EU and Malaysia. However, under the Generalised System of Preferences (GSP) which has been in existence since 2006, the proportion of Malaysian goods exports to the EU that enjoy preferential treatment has gone up from 16% to 81%, meaning that more than 70% of Malaysian exports to the EU are already free of tax. (E.H./transl.rt)