Posted on 27 Nov 2012
The conclusion of the free trade agreement (FTA) and the partnership and cooperation agreement (PCA) between the European Union (EU) and Malaysia next year will further deepen trade and business linkages between both economies.
The new EU Ambassador and Head of Delegation to Malaysia, Luc Vandebon, told Bernama recently the FTA and PCA would tackle a lot of areas that can be improved upon such as market access, greater openness from both sides and increased trade facilitation.
As the bilateral relationship develops rapidly, becoming multi-faceted and covering a lot more areas, a proper framework such as the PCA is needed to manage all the aspects that are now part of the bilateral relationship in a coherent and harmonious way, he said.
He said the FTA would also fill the gap left by the expiring Generalised System of Preferences (GSP) in January 2014 a scheme that gives developing nations reduced or zero-import tariff rates to the EU.
He said there are a lot of companies and businesses in both economies that are benefiting from the GSP which could be affected once the scheme ends.
Currently, there are more than 2,000 EU companies operating in Malaysia, with many in the electrical and electronics and metal sectors, he said. Vandebon said the FTA and PCA were initially mandated to be concluded by this year but were derailed to next year as the negotiations on the substance of the agreement took more time than expected.
As far as the time frame of the mandate is concerned, “we have not delivered, but at the same time, I think the substance is much more important than the speed of conclusion,” he said.
Admitting that the Eurozone debt crisis was taking its toll on bilateral trade between EU and Malaysia, he said total trade decreased by 24 per cent as of August this year.
The FTA could on the contrary play a part in rectifying the situation, he said.
Vandebon said the crisis in Europe was due to a combination of several elements which occurred at the same time and derailed the region into their current situation.
Excessive debts, a number of member states recording slow growth because of structural rigidities, imbalances in economic performances and the insufficient coordination of economic and fiscal policy were the factors that that led to the Eurozone debt crisis, he said.
However, he remained confident that the region would find its way out of its lingering problems as most of the EU countries are making progress with fiscal consolidation.
“They have all been taking measures to stimulate entrepreneurship, investment, employment and all of them have agreed for a EU-wide strategy for growth based on innovation, high technology and environmental sustainability.
