Brussels:Malaysia's ambition to climb the semiconductor value chain is gaining recognition from the European Union (EU). Through initiatives like the Global Gateway investment and the proposed Malaysia-EU Free Trade Agreement (MEUFTA), opportunities are emerging to bolster economic cooperation between Malaysia and the EU.
According to BERNAMA News Agency, European Commissioner for International Partnerships, Jozef Síkela, acknowledged Malaysia as a significant global semiconductor hub, now striving to elevate its position in the industry. This move is seen as a chance to develop a mutually advantageous partnership, allowing Malaysia to retain more economic value while aiding Europe in diversifying and strengthening its supply chains.
Síkela emphasized the benefits for Malaysians, including retaining more value domestically, enhancing skills, supporting local suppliers, and creating higher-quality jobs. For Europe, the partnership promises stronger and more diversified supply chains. He noted that this type of cooperation aligns with the EU's Global Gateway strategy, which aims to enhance economic ties through investment and collaboration.
The MEUFTA negotiations are also crucial, as they aim to dismantle trade barriers, encourage investment, and provide Malaysian businesses better access to the European market. The fifth round of talks took place in Brussels, and the next round is planned for Malaysia in the coming months. The negotiations, which began in June 2025, are expected to conclude by the end of 2027.
Trade between Malaysia and the EU has increased by 21% in the first eight months of this year, with Malaysian exports to Europe up by over 28% and European exports to Malaysia rising by nearly 12%. There are nearly 2,000 European companies operating in Malaysia, employing over 160,000 people directly.
Regarding EU-ASEAN cooperation, Síkela highlighted the focus on energy, digital connectivity, transport, sustainable value chains, research, and skills. He praised Malaysia's strategic position in ASEAN, excellent infrastructure, skilled workforce, and conducive business environment for international companies.
Síkela also underscored the importance of investing in interconnected electricity systems like the ASEAN Power Grid, which enhances energy security and flexibility by allowing electricity to be shared across borders. The EU has allocated 60 million euros in grants for energy cooperation with ASEAN under its regional Asia-Pacific program, in addition to bilateral support and investments from European development banks.