Malaysia expects to sign FTA with S Korea in October
Business Today - 18 August 2025
Malaysia expects to sign FTA with S Korea in October
Malaysia has concluded negotiations for a free trade agreement (FTA) with South Korea and is expected to sign the agreement in October, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz.
The minister said the agreement reflects the country’s continuous engagement with global partners to gain broader market access, particularly amid rising geopolitical uncertainties.
“To date, we have concluded 18 FTAs, both bilateral and multilateral. We’ve signed two this year and resumed talks with the European Union,” he said.
The session was moderated by Bursa Malaysia chief executive officer Datuk Fad’l Mohamed and held as part of the Macquarie Asean Conference.
When asked about Malaysia’s engagement with BRICS, despite perceived pressure from United States President Donald Trump, Tengku Zafrul said it is important for Malaysia to remain consistent in its foreign policy approach and engage all countries on equal terms.
“We are partners today. There are many other countries who are already members, and what’s important is that all these countries are also members of other economic blocs. So this will continue,” he said.
He also emphasised the importance of Malaysia maintaining a neutral stance.
“Malaysia can’t afford to (take sides). I think Asean is also playing that card well where we engage all parties,” he added.
Tengku Zafrul also highlighted the challenges facing both Malaysia and Asean, including the proposed imposition of 100 per cent tariff on imported semiconductor chips and the issue of transshipments.
He said this is particularly concerning, as the United States remains a core market for Malaysia’s electrical and electronics (E&E) sector.
Last year, Malaysia exported RM119.86 billion worth of E&E goods to the US, with semiconductors accounting for half of that value (RM60.6 billion).
“All these risks and numbers reflect why we are actively engaging with Washington to ensure sectoral carve-outs are clear and fair,” he added.
On mitigating transshipment risks, he said Malaysia is working closely with industry players to verify origin, enhance local value-add, and minimise accidental exposure.
“As a parallel, we are also putting together a detailed supply chain mapping, diversifying markets, strengthening enforcement, and boosting local value-add in production,” Tengku Zafrul added.
