KUALA LUMPUR: Malaysia and the European Union (EU) have completed negotiations on five chapters of the Malaysia-European Union Free Trade Agreement (MEUFTA), with both sides targeting to finalise the pact by 2027.
Investment, Trade and Industry Deputy Minister Sim Tze Tzin said the fourth round of negotiations, held in Kuala Lumpur from June 8 to 12, saw the conclusion of three chapters, namely Customs and Trade Facilitation, Trade Remedies and Good Regulatory Practices.
The transparency chapter was concluded during the second round of negotiations, followed by the small and medium enterprises chapter in the third round.
"We concluded the fourth round earlier this month. The next round of negotiations will be held on Sept 21-25 in Brussels, Belgium," he told Bernama after delivering his opening remarks at the Italy-Malaysia Business Mission here, today.
The business mission was organised following Prime Minister Datuk Seri Anwar Ibrahim's working visit to Italy in July last year at the invitation of Italian Prime Minister Giorgia Meloni.
Earlier in his speech, Sim said the MEUFTA would be a ‘game-changer that integrates Malaysia more closely with the world's largest single market while unlocking new opportunities in high-technology services, green energy and digital trade’.
He said the agreement would also strengthen industrial linkages and supply chains between Malaysia and Italy, creating new opportunities for businesses from both economies.
On bilateral trade with Italy, Sim said Malaysia's total trade with the country increased by 14.2 per cent year-on-year (y-o-y) to about RM17 billion (US$3.2 billion) in 2025, making Italy Malaysia's fifth-largest trading partner in Europe.
Malaysia's exports to Italy rose 12.7 per cent y-o-y to RM7.6 billion in 2025, driven mainly by palm oil and palm oil-based manufactured and agricultural products, iron and steel products, electrical and electronics (E&E) products, as well as machinery, equipment and parts.
Malaysia's imports from Italy mainly comprised machinery, equipment and parts, optical and scientific equipment, chemicals and chemical products, jewellery, as well as E&E products.
"These are all high-value goods. We have a very robust bilateral trade in both goods and services," he said.
To date, over 80 Italian manufacturing projects worth US$442 million have been implemented in Malaysia across sectors, including food processing, chemicals, machinery and equipment, as well as aerospace.
Sim said Italian companies continue to view Malaysia as a preferred investment destination because of its comprehensive industrial ecosystem and established supply chain, which enable manufacturers to localise production for the Southeast Asian market.
"I believe Italy and Malaysia can work more strongly together in many areas, including E&E, because we have a very complete ecosystem that Italy can leverage.
"Italy is very good at machine manufacturing, and so are we,” Sim said.
On Malaysia's semiconductor ambitions, he said the government would continue supporting investments in higher value-added manufacturing through the New Investment Incentive Framework, which took effect in March this year.
He said the framework offers tax incentives to encourage investments in advanced manufacturing, front-end semiconductor activities and integrated circuit design, while also supporting Malaysian companies seeking to move further up the value chain.
"A lot of people think Malaysia only gives incentives to overseas companies. That is not true. We treat everyone equally.
"Our priority is to help Malaysian industries move up the value chain and become more successful," he added. - Bernama
