Daerr and Chow commemorating the EU’s partnership with Malaysia at the European Union-Malaysia Business Day in Penang, symbolising the renewed commitment to strengthen bilateral relations.
GEORGE TOWN: Penang is well positioned to benefit from the resumption of the Malaysia-European Union (EU) Free Trade Agreement negotiations.
"The prospect of an ambitious, comprehensive, and modern free trade agreement between Malaysia and the EU is expected to create numerous new opportunities for investors and companies on both sides," EU Ambassador to Malaysia Rafael Daerr said.
EU companies are key investors in the state's key industrial segments, such as electrical and electronic precision engineering and equipment, medical devices, and aerospace and aviation.
Daerr said the EU and Penang have converging priorities regarding digital and green transitions.
"The EU is Malaysia's second-largest source of foreign direct investment with €31.6bil (RM147bil).
"The EU and its Member States have agreed to mobilise €10bil (RM46.5bil) for Asean countries under the Global Gateway Initiative until 2027," he said at the European Union-Malaysia Business Day in Penang recently.
The EU delegation to Malaysia, the state government, Eurocham Malaysia, and InvestPenang organised the event.
The event attracted over 300 participants from EU and Malaysian businesses and chambers of commerce, 23 ambassadors from EU member states, and state government officials.
Daerr said the EU-Malaysia Business Day 2025 came at a crucial time, just weeks after Malaysia and the EU officially announced their decision to resume trade negotiations.
Reflecting on the evolving EU-Malaysia economic relationship, Daerr highlighted the signing of a Partnership and Cooperation Agreement in 2022.
"The agreement is currently being ratified by EU member states and Malaysia.
"Once done, there will be formats for fresh engagements at all levels to strengthen the economic relationship," he said.
Regarding the ongoing free trade negotiations with Malaysia, Daerr noted a clear willingness on both sides to proceed as a high priority, though he refrained from predicting the duration. The fastest free trade agreement so far was completed in two and a half years.
"In any case, quality will prime over speed," Daerr added.
Prime Minister Datuk Seri Anwar Ibrahim, during his visit to Brussels on Jan 20, announced the relaunch of free trade negotiations together with European Commission President Ursula von der Leyen.
Daerr added, "Between 2019 and 2023, Penang roped in about RM100bil in manufacturing investments from the EU, about 51% of the state-approved manufacturing investments.
"During this period, Penang exported RM140bil worth of goods into the EU, representing 7% of the state's exports.
"There are a lot of untapped business potentials and opportunities for business expansion in Penang and Malaysia.”
Meanwhile, in his keynote address, Penang Chief Minister Chow Kon Yeow said the EU-Malaysia Business Day served as a vital platform for Eurocham members and key stakeholders to connect, exchange insights, and explore industry trends and opportunities.
"While this event highlights the EU's importance as a significant economic, trade, and investment partner for Malaysia, this year's theme, 'Penang in Focus', underscores the state's position as a premier investment destination for EU multinational corporations," Chow said.
He added that one of the state's flagship programmes is the Penang Strategy for Economic Ecosystem Development (Penang SEED), a five-year plan aligned with the Penang2030 vision.
"This strategy focuses on workforce development, technological innovation, sustainable growth and infrastructure enhancement.
"Through Penang SEED, we are collaborating closely with industry leaders to drive high-value sector growth, ensuring that Penang remains at the forefront of economic and technological advancements," he said.
According to Chow, the state government recently launched the 'Penang Silicon Design @ 5km+' initiative to strengthen Penang's competitive edge. It comprises three key components—the Penang IC Design and Digital Park, the Penang Chip Design Academy and the Silicon Research and Incubation Space—aimed at positioning Penang as a global hub for Integrated Circuit (IC) design and innovation.
"With its integrated ecosystem within the vibrant 5km+ area, the PSD @ 5km+ initiative offers a unique value proposition, benchmarking itself against IC design hubs in Silicon Valley, San Jose, and Taiwan," he said.
Chow and Daerr in their joint press conference highlighted the potential for cooperation across all areas covered during the EU-Malaysia Business Day 2025 in Penang: Advancing Manufacturing Excellence, E&E, Healthcare and Medical, Education and Upskilling, Building Sustainable Supply Chains, Renewable Energy Advancement, Digital Economy and Cybersecurity, and Sustainable Growth, including through the EU Global Gateway Initiative.
The broad participation of EU businesses in the event has clearly showcased their commitment to stepping up engagement in Penang.
