Bernama | April 01, 2012

Future direction of proposed Malaysia-EU FTA to be known by June

By Jamaluddin Muhammad

PHNOM PENH, April 1 (Bernama) — The future direction of the proposed Malaysia-European Union Free Trade Agreement is likely to be made by June, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said today.

"We would probably have made decision by June whether we should proceed or review the proposed FTA," he said after meeting the EU Trade Commissioner Karel De Gucht on the sideline of the Asean-EU Business Summit, here.

Mustapa said both parties were committed to resolving during negotiations the challenging issues which he described as "tough but doable".

The negotiation entered its sixth round in this capital and the next round is scheduled to take place in Brussels next month and the subsequent round in Kuala Lumpur in June.

Among the hot issues discussed was on the EU asking Malaysia to open up its services sector in telecommunications and banking.

Malaysia explained its position on the matter, saying that it had to take into consideration the country’s interest too.

On the question of high tax imposed by Malaysia on alcohol, Mustapa said Malaysia had told them that the move was necessary to discourage the drinking habit.

Malaysia had also strongly maintained its position on its oil palm plantations, saying they were sustainable and their operations supported by scientific data despite the differing views from EU.

Although the negotiations have made some progress, there are still some hindrances faced, Mustapa said.

He said both sides would try to reduce the challenging gaps between the current negotiation and the forthcoming round.

"In the meantime, we need to discuss further the matters with our industries and other ministries, subject to the Cabinet’s approval."

The minister stressed that the negotiations did not meet a deadlock as they were still discussing the issues in open and frank engagements.

"Both sides are addressing them and looking for a win-win situation."

However the finalisation of the FTA could be extended for another three or four months if the decisions are not made by June.

Mustapa said Malaysia had hoped to conclude the FTA by June, 18 months after entering the negotiations on the agreement aimed at enhancing trade between the two sides.

On the Asean-EU Business Summit, Mustapa said EU investors were still attracted to the region due to its 600 million population, sound economic growth, growing middle class and young population.

— BERNAMA