KUALA LUMPUR (March 26): Malaysia and South Korea on Tuesday officially resumed negotiation on a free trade agreement to boost bilateral trade and investment between the two countries.
The Malaysia-Korea Free Trade Agreement is expected to cover areas on digital economy, green economy, supply chain, and bioeconomy, the Ministry of Investment, Trade and Industry (Miti) said in a statement. Negotiations between the two countries were suspended in 2019.
In the last few years, bilateral trade between Malaysia and South Korea “has shown an upward trend that we must continue to build on”, said Miti Minister Tengku Datuk Seri Zafrul Abdul Aziz.
South Korea is Malaysia’s eight-largest trading partner while Malaysia is South Korea’s 12th biggest trading ally. Both countries are already parties to the Asean-Korea Free Trade Agreement and the Regional Comprehensive Economic Partnership Agreement.
In 2023, total trade with South Korea totalled RM111.1 billion with Malaysia exporting electrical and electronic (E&E) products, oil and gas, metal manufactures, and scientific equipment. Malaysia also imports petroleum products, E&E, chemical products, machinery, and parts from South Korea.
Trade relations between Malaysia and South Korea “has existed for over four decades, and we also hope to leverage on this to help us move our target industries up the global value chain in sectors such as E&E, medical devices, pharmaceuticals, the green economy and chemicals”, Tengku Zafrul said.
In terms of investment, South Korea has been one of Malaysia’s top sources of foreign direct investment for the manufacturing sector. There were 390 projects worth about RM40 billion have been implemented as of December 2023.
Most of these investments were in chemical and chemical products, basic metal products, E&E, petroleum products and food manufacturing products.
There are also around 500 South Korean companies operating in Malaysia, according to Miti.
