|EU-Malaysia Business Relations|
In terms of bilateral trade relations, Malaysia is the second most important trade partner of the EU in ASEAN, and ASEAN is in turn the fifth largest trading partner in the world for the EU.[i] In return, the EU represents the third most important trade partner of Malaysia in terms of geographical areas, after Northeast- and Southeast Asia, respectively, and before North America. The total annual trade volume between both regions amounts to almost MYR 153 billion and has grown by 45% in absolute terms since 2003.[ii] Additionally, the EU is a highly relevant source of investment in Malaysia, having a considerable share in the annual amount of Foreign Direct Investment in the country. In 2012 the EU was the largest source of FDI into Malaysia. EU FDI stock in Malaysia has grown from â‚¬9.4 billion in 2006 to â‚¬24 billion in 2011, the third highest in ASEAN. Historically, the manufacturing sector attracts the biggest share of FDI, with a share between half and two thirds of the entire annual FDI pie [iii], while the Oil&Gas sector has been gaining attractiveness over the recent years and accounted for roughly 13% of FDI in 2012. [iv] Putting the pieces together, one can find about 2000 European companies operating in Malaysia, ranging from SMEs to MNOs of all sizes. Hence, the EU has emerged as a key strategic partner in Malaysiaâ€™s development ambitions.
In 2010, negotiations were launched for a Free Trade Agreement between the EU and Malaysia, and there are also ongoing negotiations for a Partnership Cooperation Agreement (PCA) and timber trade Voluntary Partnership Agreement (VPA).
[i] http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122530.xls accessed on 22 April 2013
[ii]http://www.statistics.gov.my/portal/download_External/download.php?file=ExternalTrade/2012/DEC/04JADUAL_DEC2012.xls accessed on 22 April 2013
[iii]http://www.statistics.gov.my/portal/images/stories/files/LatestReleases/iippost/IIP_TABLE2011.xlsx accessed on 22 April 2013
[iv] Bank Negara Malaysia Annual Report 2012