KUALA LUMPUR: The government is taking steps to resume negotiations on the Malaysia-European Union Free Trade Agreement (MEUFTA).

Deputy Minister of International Trade and Industry Datuk Lim Ban Hong said the government is aware of the importance of the European Union as one of Malaysia's main trading partners.

"At the latest discussions on Dec 23, 2021, both sides took note of the current issues still pending and sought to negotiate the approach and direction of this agreement.

"The decision to resume negotiations will be made carefully after taking into consideration the interests of all parties," he said during the winding up of the debate on the motion of thanks for the Royal Address for the ministry.

The Cabinet decided to postpone the MEUFTA negotiations on Aug 14, 2019 due to a lack of understanding from both parties regarding sensitive issues such as government procurement, Bumiputera policy, intellectual property rights, geographical indications, and halal issues.

In relation to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Lim said a cost-benefit analysis to identify the impact of Malaysia's participation has been completed and will be presented to the Cabinet soon.

"This document will be uploaded on to the Ministry of International Trade and Industry (MITI) website for general reference, especially to stakeholders," Lim added.

Malaysia and the US had agreed on November 2021 to draft a memorandum of cooperation.

The collaboration would contribute to MITI's efforts to formulate an action plan to strengthen the supply chain of strategic products in the country, he said.

"This will also include efforts to address the risk of natural disasters or health crises that may occur in the future that could affect the production of strategic products from meeting local and international demand," he added.

On the Russia-Ukraine conflict, he said the direct impact on Malaysia was minimal as the trade with both these countries was about 0.5 per cent of total trade.

"However, we need to look at the indirect impact on Malaysia's trade, particularly in sectors such as electrical and electronics which contributes about 13 percent to global chips testing and packaging; this is an important process in semiconductor production.

"The continued disruption of the global chain, weak demand in Europe and regional countries involved in the semiconductor sector will have an indirect impact on our trade," he added.

-- BERNAMA