PETALING JAYA: Datuk Seri Azmin Ali has stated that Malaysia should engage with relevant stakeholders before proceeding with the Malaysia-Korea Free Trade Agreement (MKFTA).
He expressed concern that the MKFTA may not necessarily provide additional benefits compared to the existing Asean-Korea FTA (AKFTA), in which Malaysia is already a participant.
Azmin cautioned that Malaysia could be required to eliminate duties on a larger number of goods as opposed to South Korea.
He highlighted the importance of conducting a detailed cost-benefit analysis by the Investment, Trade and Industry Ministry (Miti) before making a decision on resuming the MKFTA.
Malaysia and South Korea recently agreed to resume the MKFTA in an effort to boost bilateral trade and investment between the two nations, as announced by Miti.
Both countries are currently part of the AKFTA and the Regional Comprehensive Economic Partnership (RCEP) agreement.
Azmin noted that in 2019, under the Pakatan Harapan administration, Malaysia and South Korea agreed on liberalisation principles aiming for a 92% threshold under the MKFTA, building upon the AKFTA.
He raised concerns about the unequal nature of the agreement, with South Korea only needing a slight improvement in offers compared to Malaysia’s significant need for liberalisation enhancements.
There were discussions on over 1,600 products, including automotive parts and iron and steel, with Malaysia requesting concessions on around 500 products.
Consultations with industries in areas such as automotive, iron, and steel sectors in Selangor, where many operate, were recommended by Azmin.
Trade between Malaysia and South Korea in 2023 amounted to RM111.1bil (US$24.3bil), with Malaysia being South Korea’s third largest trading partner in Asean and 12th globally.
Key exports from Malaysia to South Korea included electrical and electronics products, liquefied natural gas, petroleum products, metal products, and optical and scientific equipment.
Major imports from South Korea to Malaysia comprised petroleum products, E&E products, chemicals, machinery, equipment, parts, and iron and steel products.
