Negotiating for a Malaysia-EU FTA: Contesting Interests from Malaysia’s Perspective

Summary:

Malaysia has shifted its focus from multilateral and regional to bilateral trade agreements due to the current doldrums in the Doha Round and the bandwagon effect from similar shifts in other countries.

Despite the importance of trade to the country, negotiations on free-trade agreements (FTAs), especially with developed countries, are fraught with difficulties. Malaysia is still a developing country; its developmental needs may conflict with the requirements of reciprocal market access. Furthermore, FTA negotiations with developed countries generally aim to achieve WTO-Plus commitments that may encounter domestic resistance from different segments of Malaysian society.

The objective of this paper is to analyze the contesting interests of different economic groups such as producers (including government-linked companies), consumers and other social groups in the ongoing FTA negotiations with the EU. The findings in this paper indicate that, in this proposed FTA, there are strong contestations within key offensive and defensive interests of Malaysia. Resolving these contestations requires a clear mandate from the government on the importance and priority of this FTA to the country, relative to other agreements.

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