PETALING JAYA: Malaysia should consult relevant stakeholders before resuming the Malaysia-Korea Free Trade Agreement (MKFTA), says Datuk Seri Azmin Ali.

The former international trade minister said the MKFTA might not necessarily add value to the existing Asean-Korea FTA (AKFTA), to which Malaysia was already a party.

He warned that Malaysia might have to remove duties on substantially more goods compared with South Korea.

"While I understand that the MKFTA will also cover other areas such as economic cooperation, digital and green economy, supply chain and bio-economy, outcomes in these areas are usually collaborative in nature and may not necessarily be commensurate with the sacrifices that Malaysia will need to make by removing duties across 1,600-plus products.

"Given the circumstances above, I would urge the Investment, Trade and Industry Ministry (Miti) to undertake a detailed cost-benefit analysis and make it publicly available (as was the case with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP), before a decision is made regarding the resumption of MKFTA," he said in a statement on Wednesday (March 27).

On Tuesday (March 26). Malaysia and South Korea resumed the MKFTA in an effort to increase bilateral trade and investment between the two countries, according to a statement from Miti.

Currently, both countries are parties to the AKFTA and the Regional Comprehensive Economic Partnership (RCEP) agreement, the Miti statement said.

Azmin said In 2019, when Datuk Darell Leiking was in charge of Miti during the Pakatan Harapan administration, Malaysia and South Korea agreed to a set of guiding principles which stipulate an overall liberalisation threshold of 92% with a view to ensuring that the MKFTA builds upon the AKFTA.

"Essentially, this lopsided agreement means that the Korean side will only need to improve about 1% on their offers (as they have already committed to elimination of duties on 91% of their tariff lines in AKFTA) while Malaysia will need to significantly improve our liberalisation offers from 83.5% to 92%.

"I also recall that the Korean request involved more than 1,600 products including automotive parts and components, as well as iron and steel.

"In return, Malaysia requested concessions across 500-odd products. Again, it was not possible for Malaysia to request more products as the Korean side was only required to add one percentage point of products to meet the 92% threshold," he claimed.

Azmin, the Selangor opposition leader, said extensive consultations should be undertaken with industries in the state, many of which operate in the automotive as well as iron and steel sectors.

Last year, total trade with South Korea amounted to RM111.1bil (US$24.3bil).

Malaysia was ranked South Korea’s third largest trading partner in Asean, and 12th largest globally, with total trade amounting to RM118.4bil (US$25bil) in the same period.

Malaysia’s major exports to South Korea were electrical and electronics (E&E) products, liquefied natural gas (LNG), petroleum products, metal products and optical and scientific equipment.

Major imports from South Korea were petroleum products, E&E products, chemical and chemical products, machinery, equipment and parts, and iron and steel products.

https://www.thestar.com.my/news/nation/2024/03/27/more-consultation-needed-before-resuming-free-trade-pact-with-s-korea-says-azmin