Malaysia in talks for new free trade deals to blunt impact of geopolitical conflicts — Zafrul
14 Oct 2024
Malaysia is currently negotiating several new free trade agreements (FTAs) that would help to diversify its trade and investments, and mitigate the impact of conflicts in the Middle East and the Russia-Ukraine war.
The FTAs under negotiation include the Malaysia-United Arab Emirates Comprehensive Economic Partnership Agreement and the Asean-Canada FTA, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz told the Dewan Rakyat on Monday.
“In addition, Malaysia is also in negotiations to upgrade the Asean Trade in Goods Agreement and the Asean-China FTA to open markets for more stable and competitive Malaysian exports,” he said.
Malaysia has signed and implemented 16 bilateral and regional FTAs, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that covers 11 countries from Australia to Mexico.
The government is also in talks for a Malaysia-European Free Trade Association Economic Partnership Agreement.
Zafrul emphasised that current geopolitical tensions had minimal short-term impact on Malaysia, as Russia and Ukraine accounted for only 0.5% of Malaysia’s total trade in 2023, while trade with Middle Eastern countries involved in conflicts is also relatively low.
“Malaysia adheres to a non-aligned policy, avoiding alignment with any economic or military bloc in addressing geopolitical issues,” he said. “However, as a trade-dependent country, international geopolitical tensions have the potential to affect the economy in the long term.”
To blunt the impact, Malaysia is strengthening ties with major trading partners such as Asean, the US, China and the EU, as well as exploring new markets in Central Asia, South America and Africa, Zafrul said.
He added that the government is also encouraging local industries to increase the use of domestic resources and reduce reliance on foreign imports, particularly through Asean nearshoring — the outsourcing of business processes to a nearby country.
Source: The Edge Malaysia
