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Malaysia

EU trade relations with Malaysia. Facts, figures and latest developments.

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Malaysia
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Negotiations and agreements

Negotiations for a Free Trade Agreement (FTA) between the EU and Malaysia were launched in 2010 and put on hold after seven rounds in 2012 at the request of Malaysia. A stocktaking exercise took place in 2016-17 to assess the prospect to resume negotiations. The new government appointed in August 2021 has yet to take a position on the possible resumption of the negotiations.

Malaysia is a member of the WTO since its creation in 1995.

Trade picture

  • Bilateral trade between the two partners equaled €35.2 billion in 2020. EU imports from Malaysia stand at €24.7 billion in 2020 while EU exports have reached €10.5 billion last year.
  • The EU is the fifth largest trading partner of Malaysia (after China, Singapore, South Korea and the US), accounting for 7.4% of the country’s total trade. In 2020, Malaysia became the EU's 20th largest trading partner in goods.
  • Bilateral trade between the EU and Malaysia is dominated by industrial products. The EU mainly imports machinery and appliances and mainly exports electrical equipment and machinery (both ways industrial products account for more than 90% of trade). Other sectors of relevance in terms of EU imports from Malaysia are plastics and rubber and animal and vegetable fats and oils and in terms of exports, mechanical products.
  • Although Malaysia has not been a major trading partner in services so far, opportunities have already been increasing due to its liberalisation policies and would even further advance with a FTA. In 2019, Foreign Direct Investment outward stocks in Malaysia were €24.3 billion.

The EU and Malaysia

Even though the FTA negotiations between the EU and Malaysia are on hold, a Sustainability Impact Assessment (SIA) was launched in support of FTA negotiations between the two partners. The SIA seeks to assess how trade and trade-related provisions in the proposed FTA could potentially impact economic, social, human rights, and environmental elements in each trading partner and in other relevant countries.

Malaysia and ASEAN

Malaysia is one of the 10 members of the Association of South East Asian Nations (ASEAN), the third largest economy in the region in terms of GDP (12%) and the EU’s third largest trading partner in ASEAN.

The ASEAN region is a dynamic market with some 640 million consumers and ranks as the eighth economy in the world. The countries as a group are the EU's third largest trading partner outside Europe, after the US and China.

Ensuring better access for EU exporters to the dynamic ASEAN market is a priority for the EU. Negotiations for a region-to-region trade and investment agreement between the EU and ASEAN were launched in 2007 and paused by mutual agreement in 2009 to give way to a bilateral format of negotiations.

These bilateral trade and investment agreements were conceived as building blocks towards a future region-to-region agreement.

More information on ASEAN

Trading with Malaysia