Malaysia mulls FTA with Lanka

by Rohana Jayalal

The Malaysian government is exploring the possibility of a Free Trade Agreement (FTA) with Sri Lanka to increase bilateral trade and investments, Malaysia’s Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said.

“We believe an FTA with Sri Lanka will pave the way for trade between Sri Lanka and Malaysia to reach a new level,” he told a press conference in Colombo. The Minister was in Sri Lanka last week on a mission to promote Sri Lanka’s investments in Malaysia.

The Malaysian Minister said there are many opportunities to explore trade, business and investments between Malaysia and Sri Lanka. “We could discuss the possibility of a trade agreement with our Cabinet of Ministers on my return,” he said.

Both countries are expected to get parliament approvals before commencing official negotiations pertaining to the FTA, he said.

The Minister said Sri Lanka is a promising market for Malaysia as both countries shared similar cultural and geographical links. “We should be working more closely now to boost economic ties in the future, and many Malaysian companies were keen to do more business and forge partnerships in Sri Lanka.”

This would be especially helpful to balance Sri Lanka’s deficit with Malaysia in the trade of goods and it would help provide a commercially meaningful market across ASEAN regional countries for Sri Lankan investors. Malaysia is the ideal gateway for Sri Lankan investors to penetrate ASEAN regional and global markets in the future, the Minister said.

He said he was satisfied with the work the Sri Lankan government had done to promote trade and investment ties with Malaysia and urged the government and stakeholders to come up with aggressive promotional campaigns to promote Sri Lanka’s products and services in Malaysia, as Malaysia plans to import more from Sri Lanka.

Malaysia is one of the main investors in Sri Lanka and so far Malaysian companies have invested more than US $ 2 billion in Sri Lanka, he said.

Malaysian investors are also looking at the projects proposed by the Megapolis plan. “The Malaysian government hopes to get involved in implementing the proposed monorail project in Sri Lanka, after the tenders for the monorail project are opened in June.”

Mustapa said the Minister of Development Strategies and International Trade, Malik Samarawickrama has invited Malaysian companies to step up investments, tourism and education sector ties with Sri Lanka.

In 2015, trade between the countries amounted to US$ 570 million with exports at US$ 480 million and imports at US$ 90 million.

Sri Lanka’s imports from Malaysia include animal or vegetable fats and oils, palm oil and palm-based products, machinery and mechanical appliances and parts and wood and articles of wood, electrical and electronic products, petroleum products, chemicals and chemical products, while import products comprise rubber and rubber products, apparel and clothing, coffee, tea and spices.

A Malaysian International Trade and Industry Ministry official said they signed a Memorandum of Understanding between the Malaysia-based lubricant manufacturer, Hyrax Oil Sdn Bhd and the Ceylon Petroleum Corporation.

The 44-member trade and investment mission included top officials of the Malaysia Investment Development Authority (MIDA) and Malaysia External Trade Development Corporation (MATRADE).