Brussels, 27/04/2015 (Agence Europe) - On the sidelines of the EU-ASEAN ministerial consultations in Kuala Lumpur on Sunday 26 April, European Commissioner for Trade Cecilia Malmström called for the free trade negotiations with Malaysia to be resumed. These were launched in 2010 and have been on hold since the general elections in Malaysia in spring 2013. Malmström nevertheless underlined the need to reassess the tariff offers, the section linked to services and the aspects linked to intellectual property. She also called for export taxes on natural resources to be lifted and for the opening up of government procurement to be covered.
“An ambitious free trade agreement would significantly increase bilateral trade. Apart from the scale of the European single market, its most important quality is its diversity”, Malmström stated, underlining that free access to the European market would be “invaluable” as it imports everything from raw materials to high-tech goods and services, and as Malaysia is increasingly moving towards innovative, cutting-edge production. For the EU, free access to the Malaysian market would be “a way to connect more deeply with the Asian regional value chain”.
“Over almost three years [2010-2013] of work, our teams of negotiators made good progress on almost all issues on the table. That progress shows that a deal is possible. But it was not enough. And we were unable to resolve the most difficult issues. So, two years ago, we agreed to pause the negotiations”, Malmström nevertheless stated. “We have an excellent opportunity right in front of us. It would be a shame to waste it. But at the same time, if we do restart the negotiations, then we need to know that both sides are ready to do a deal. There's no point getting bogged down in the same issues for a second time. That means both sides must make clear that they are serious about an ambitious deal, and that they are ready to do what it takes to reach it (…) It takes two to tango. Europe is certainly ready to dance (…) But, we need a partner: we must be confident that Malaysia is ready to contribute too”, Malmström continued.
“If we want a result that is truly ambitious, both Malaysia and the EU must be ready to contribute across the board”. This means looking again at the offers on tariffs, reassessing the chapter on services (where market access and transparency on regulation are both important), and looking at geographical indications and other important aspects of intellectual property, Malmström stated. She also called for export taxes to be lifted - especially on natural resources - and for the opening of government procurement to be covered by the agreement. “I believe in the general principle that open public procurement markets allow governments to buy the best goods and services at the best prices. But I also understand that this is sensitive, and that it relates to one of the core issues of Malaysian politics”, Malmström said. “So I want to be very clear that on this, and on the other issues I've mentioned: Europe is not asking for a revolution. We simply want a deal that creates real economic value for both sides - a deal that will give new opportunities to Malaysians and Europeans”, she concluded.
The EU is Malaysia's third biggest trading partner, while Malaysia is the EU's second largest trading partner in the ASEAN area. Dominated by industrial products (90%), bilateral trade in goods reached €33.7 billion in 2014, including €14 billion in exports for the EU - in other words, a €5.7 billion deficit. Trade in services reached €7.4 billion in 2013, including €4.2 billion in exports for the EU. Foreign direct investment stock leaving the EU for Malaysia was €17.4 billion in 2013 and stock entering the EU from Malaysia was €14 billion.
Malaysia stopped benefitting from the EU's trade preferences in 2010. (Emmanuel Hagry)