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The MKFTA is expected to cover areas on digital economy, green economy, supply chain, and bioeconomy.
In efforts to increase bilateral trade and investment, Malaysia and the Republic of Korea have announced the resumption of the Malaysia-Korea Free Trade Agreement (MKFTA).
The MKFTA is expected to cover areas on digital economy, green economy, supply chain, and bio economy. Currently, both Malaysia and Korea are parties to the ASEAN-Korea Free Trade Agreement and Regional Comprehensive Economic Partnership (RCEP) Agreement. Bilateral trade growth and industry demand between the two countries have been encouraging, and the MKFTA is expected to bolster existing economic ties.
At the meeting, Malaysia was represented by Minister of Investment, Trade and Industry, Tengku Datuk Seri Utama Zafrul Abdul Aziz, while Korea was represented by Minister of Trade of the Republic of Korea, Cheong Inkyo. Key highlights include discussions on the comprehensive coverage areas of MKFTA, where both parties expressed optimism about the potential economic growth and cooperation in the abovementioned sectors.
Tengku Zafrul said: “In the last few years, Malaysia-ROK’s bilateral trade has shown an upward trend that we must continue to build on.
"As Malaysia’s eighth largest trading partner, and a key collaborator to Malaysia’s Look East Policy, the resumption of the FTA between Malaysia and ROK is both timely and strategic. Malaysia-ROK trade relationship 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.”
For some background, total trade with the ROK in 2023 amounted to RM111.1bn Malaysia’s major exports to were E&E products, LNG, petroleum products, manufactures of metal and optical & scientific equipment. At the same time, major imports from the ROK were petroleum products, E&E products, chemical and chemical products, machinery, equipment and parts, as well as iron and steel products.
In terms of investments, Korea has been recorded as one of Malaysia’s top sources of Foreign Direct Investment for the manufacturing sector — as of December 2023, a total of 390 projects worth RM40bn have been implemented, generating 48,374 jobs. Most of these investments were in chemical and chemical products, basic metal products, electrical and electronics, petroleum products and food manufacturing products.
According to MITI's statement, an estimated 500 Korean companies are operating in Malaysia.
Lead image / Ministry of Investment, Trade and Industry, Malaysia
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