Malaysia, South Korea study possible FTA

South Korea and Malaysia are exploring a possible bilateral Free Trade Agreement, or FTA, to expand trade and investment ties.


The Malaysian International Trade and Industry ministry issued a statement to Xinhua, saying both countries have agreed to conduct separate studies on the 'feasibility of commencing FTA negotiations' after leaders from both sides decided to 'explore means to strengthen bilateral relations.'


"Based on the assessment, both countries shall develop concrete recommendations for the possible initiation of negotiations for a bilateral FTA," the ministry said.


Leaders of Malaysia and South Korea have met each other frequently within the past year.


Malaysian Prime Minister, Najib Razak lauded his visit to South Korea last month as productive, five month after he held talks with its president, Lee Myung Bak at his office in Malaysia's federal administrative centre, Putrajaya.


The ministry added that both countries would "identify the implications of the establishment of a bilateral FTA and assess the economic benefits and challenges that may arise."


South Korea already established an FTA with the South East Asian Nations, Asean in 2006, which subsequently led to both the East Asian country and Malaysia, a member of Asean eliminating import duties on almost all their products.


South Korea was Malaysia's 13th largest trading partner in 2010, exporting electrical materials, medical parts, iron and steel while importing mineral fuels, electrical products and mechanical appliances from Malaysia.


Its trade with Malaysia surged by 31.6 percent to 15.65 billion U.S. dollars in 2010 compare to a year before.


South Korea is also one of Malaysia's main sources of foreign direct investment, with nearly 300 projects implemented and a total investment of 2.7 billion U.S. dollars.
(Source:http://news.xinhuanet.com)