14/10/2026

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WEDNESDAY | OCT 14, 2026

M’sia aims to conclude FTA talks with EU by June 2027 o About 80% of issues settled to date, says Johari

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA LUMPUR: Malaysia is targeting to conclude negotiations on a free trade agreement (FTA) with the European Union (EU) before the end of June 2027, with about 80% of the issues settled to date, said Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani. He expressed confidence that both sides could resolve the remaining differences, which include palm oil and automotive related matters. “I would say almost 80% already done. Both parties agree. Only the 20% that has something to do with the EU and something to do with us. I think we should be able to resolve that,” he told reporters at the EU-Malaysia Business Day 2026: Selangor in Focus yesterday. Johari said the agreement would give businesses in Malaysia and the EU greater access to each other’s markets, creating opportunities for trade and investment. “At the end of the day, when we sign the FTA, the idea is there will be a free access market between both countries, ours and the EU, the EU with us. The more that we have very open markets, we are able to access, the better for us,” he added. Johari said the agreement would be Malaysia’s 18th free trade agreement. He disclosed that compliance with the EU Deforestation Regulation (EUDR) was not a red line for Malaysia, pointing to efforts by major plantation groups to prepare for the requirements. Johari named United Plantations, Sime Darby, Kuala Lumpur Kepong Bhd and IOI Corporation among the companies working towards compliance. He said six or seven major producers accounted for about 60% of Malaysia’s crude palm oil output, which he put at around 20 million tonnes annually. The regulation requires companies placing relevant commodities and products on the EU market to meet requirements aimed at ensuring they are not linked to deforestation. Compliance involves demonstrating that products meet the applicable requirements, including through traceability and due diligence. Johari said Malaysian producers were already preparing to meet the EU’s requirements ahead of the finalisation of the implementation framework. The European Commission’s latest account of the negotiations indicated slower progress on services and investment, export duties,

NanoMalaysia Berhad received RM4 million for the Cerah Madani initiative to reduce community energy costs, while Bioeconomy Corporation received RM2.5 million to recycle used fishing nets through four regional hubs and 30 community collection centres, generating additional income for more than 2,000 fishermen,“ he said. Chang said Mosti is also committed to continuing efforts to cultivate science, tech nology and innovation inclusively in 2027 and to ensuring the Budget 2027 allocation is implemented effectively to maximise economic and social impact, in line with the agenda of Bringing Science to the People, Humanising Technology and Mainstreaming Innovation towards making Malaysia a competitive and sustainable technology-creating nation. – Bernama and up to €429 million in financing from the European Investment Bank. The expansion of NXP’s semiconductor operations in Petaling Jaya includes an addi tional 500,000 sq ft of space. Production ramp-up is expected to begin in the second quarter of 2028, with output at the site expected to more than double when the expansion reaches full capacity. The project was presented as an example of the EU’s Global Gateway strategy to support industrial development and strengthen economic partnerships. “The NXP investment is not only about expanding production capacity; it’s about creating skilled jobs, developing advanced capabilities, strengthening Malaysia’s in dustrial ecosystem, and helping the country capture more value,” Sikela said. Semiconductors were essential to artificial intelligence, clean technology, automotive manufacturing and digital infrastructure, he said, adding that Malaysia was on its way to becoming “a real global semiconductor superpower”. Sikela also highlighted opportunities for cooperation in renewable energy, the Asean power grid, digital connectivity, advanced manufacturing and sustainable technologies, including the development of Lumut Maritime Industrial City. He said closer cooperation between Malaysia and the EU was important amid geopolitical uncertainty and changes in global trade. He emphasised that the EU wanted to work with Malaysia as a partner rather than impose its priorities. Malaysia and the EU recorded €48.9 billion in bilateral goods trade in 2025, according to the European Commission. Malaysian exports to the bloc totalled €30.3 billion, while imports from the EU amounted to €18.6 billion. Separately, EU ambassador Rafael Daerr said Malaysian exports to the European Union rose 28% in the first half of 2026, while imports from the bloc increased 12% over the same period.

Johari (third from left), Daerr (left), Sikela (second from left) and Selangor State Executive Councillor for Investment, Trade, and Mobility Ng Tse Han (second from right) officiate at the opening of EU-Malaysia Business Day 2026: Selangor in Focus at the Kuala Lumpur Convention Centre yesterday. – BERNAMAPIC

efforts to comply with the EUDR, saying the delay in its implementation was driven partly by pressure from other partner countries that were not yet meeting the requirements. “I have to congratulate Malaysia for the leadership in this area. This is really true that Malaysia delivered a huge effort in order to comply,” he said. Sikela highlighted a planned investment by Dutch semiconductor company NXP Semiconductors in Malaysia, involving about €950 million (RM4.34 billion) in investment

motor vehicles, geographical indications and raw materials. Negotiations began in 2010 but were suspended in 2012 before resuming in January 2025. The EU held its fifth negotiating round in September, with the sixth round scheduled to take place in Malaysia in January. More than half of the product-specific rules-of-origin chapters have been agreed, according to the commission. EU Commissioner for International Part nerships Jozef Sikela commended Malaysia’s

Mosti to use RM1.29b allocation to boost semiconductor sector, startups PUTRAJAYA: The Ministry of Science, Tech nology and Innovation (Mosti) will utilise the RM1.29 billion allocation under Budget 2027 to strengthen the semiconductor industry, AI, the technology startup ecosystem and commer cialisation of local research output. by the people and contribute to national economic growth,“ he said in a statement yesterday. received RM10 million for the pilot project of the Fund for Ownership, Resilience, Growth & Emerging Technologies. strengthen disaster management, food security and border control. “To bring innovation to the people and strengthen environmental sustainability,

He said Cradle Fund Sdn Bhd received RM41 million to implement the Malaysian Startup Ecosystem Roadmap 2026-2030, which targets 5,500 active startups and 5,000 skilled job opportunities, including through the CIP Spark and CIP Sprint financing programmes. “In addition, RM2 million has been allocated for the GLC Innovation Workshop Programme to connect corporations with startups and small and medium enterprises in the oil palm plantation sector through the use of IoT technology, robotics and data analytics to boost productivity and reduce reliance on labour,” he said. In the area of strategic technology, Chang said the Malaysian Space Agency received RM7.5 million for the development of computing infrastructure, a space AI laboratory and an Integrated GeoAI Analytics Platform to

Chang said Mosti received an overall allocation of RM1.29 billion for 2027, comprising RM775.46 million for operating expenditure and RM516.93 million for development expenditure, an increase of RM16.49 million or 1.29% compared with RM1.28 billion in 2026. “Under Budget 2027, Mosti will implement 61 projects under the Second Rolling Plan of the 13th Malaysia Plan, covering research, develop ment, commercialisation and innovation, strategic technology and strengthening of the industrial ecosystem to drive inclusive and sustainable national science, technology and innovation development,” he said. To strengthen the startup ecosystem and the local semiconductor industry, Chang said the Malaysian Technology Development Cor poration received RM10 million for follow-on equity financing through the SemiconStart Programme, while Kumpulan Modal Perdana

Minister Datuk Chang Lih Kang said the funding reflects the government’s commitment to strengthening the country’s technological and innovation capabilities, while ensuring research output can be commercialised, the growth of local companies, and the creation of more high-value jobs. “Budget 2027, themed Menggapai Di Langit, Mengakar Di Bumi (Reaching for the Skies, While Anchored on Our Values), reflects the govern ment’s commitment to strengthening the nation’s technological and innovation capa bilities. “Through this RM1.29 billion allocation, we want to accelerate Malaysia’s transition from a consumer to a creator and owner of technology, while ensuring the benefits of innovation are felt