Bloomberg | Oct 6, 2010

Malaysia, European Union hold free-trade talks to strengthen economic ties

By Ranjeetha Pakiam

Malaysia and the European Union began negotiations on two bilateral initiatives, including a free-trade agreement, to boost economic ties and investment as the global recovery slows.

Malaysian Prime Minister Najib Razak and European Commission President Jose Barroso yesterday officiated at the start of talks for the EU-Malaysia Free Trade Area and the EU- Malaysia Partnership and Cooperation Agreement in Brussels, according to an e-mailed statement from the Delegation of the European Union to Malaysia.

Malaysia’s economy grew near the fastest pace in a decade in the second quarter and may expand more than 6 percent this year, central bank Governor Zeti Akhtar Aziz said in August. The EU is Malaysia’s fourth-largest trading partner, with bilateral trade in goods reaching 23 billion euro ($32 billion) in 2009, according to the statement.

The proposed FTA will provide a long-term legal framework, removing tariffs on most goods and opening up trade in services, while the PCA will expand the EU’s engagement with Malaysia in areas including taxation and customs, intellectual property rights, combating terrorism and transnational crime, good governance, human rights, migration and trafficking in persons.

The negotiations may last between 18 and 24 months, according to the statement.