EU and Malaysia relaunch talks on free trade agreement

The European Union and Malaysia will resume negotiations on a free trade agreement after a 13-year hiatus. European Commission president Ursula von der Leyen announced the news on Monday, following Malaysian prime minister Anwar Ibrahim's visit to Brussels.

"While some are turning inwards towards isolation and fragmentation, Europe and Malaysia are choosing a different path: reaching out, building partnerships and creating new opportunities for our people," said von der Leyen, referencing the inauguration of Donald Trump in the United States.

The EU and Malaysia currently trade around 45 billion euros a year in goods and another 11 billion euros in services. They ​ began negotiations on a free trade agreement in 2010, but talks were suspended two years later due to disagreements over the trade of palm oil.

Malaysia is the world's second largest palm oil exporter. When the EU decided to tackle deforestation by regulating palm oil, Malaysia appealed to the World Trade Organisation (WTO). The WTO largely ruled in favour of the bloc, rejecting Malaysia's claim that the palm oil restrictions violated fair trade practices.

'Important milestone'

Anwar, on a two-day visit to Brussels, called the resumption of negotiations an "important milestone" that will boost exports of palm oil as well as electronic products and scientific equipment. A deal, he said, would also boost European investment in green energy and advanced manufacturing.

Von der Leyen agreed that a deal would take trade to the next level, but stressed that such agreements are about more than economics. "We will seek to build our partnership on strong commitments on labour rights and climate and environmental protection," she said.

^{A palm oil farmer loads palm oil seeds into a truck © PHOTO WAHYUDI / AFP}