EU launches free trade negotiation with Malaysia

The negotiations were officially launched by European Commission President Jose Manual Barroso and Malaysia Prime Minister Najib Tun Razak on the sidelines of the eighth Asia- Europe Meeting (ASEM), which wrapped up here on Tuesday.

EU Trade Commissioner Karel De Gucht said he expected an agreement to "provide Malaysia with quality investment from Europe and open up new market opportunities for Malaysian and European businesses."

The free trade deal with Malaysia would be comprehensive package covering tariffs, non-tariff barriers as well as commitments on other trade related issues, notably procurement, competition and sustainable development, according to the EU.

It would be the first time that Malaysia would include sustainable development and government procurement commitments in a free trade agreement.

The EU is Malaysia's fourth largest trading partner, while Malaysia is the EU's 22nd largest. Trade flows between the two sides reached 24.4 billion euros (33.6 billion U.S. dollars) in 2009.

No bilateral preferential trade arrangements currently exist between Malaysia and the EU, but under the new Generalized System of Preferences (GSP), in force since January 2006, the share of Malaysia's merchandise exports to the EU eligible for preferential treatment rose from 16 percent to 81 percent. Over 70 percent of Malaysia's exports to the EU now enter duty-free.

EU trade ministers last month agreed to launch negotiations with Malaysia, the EU's second trading partner inside ASEAN, behind Singapore. Kazinform cites Xinhua. See www.xinhuanet.com for full version.