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SEOUL, March 21 (AJP) - As Malaysia and South Korea look ahead to the 65th anniversary of diplomatic relations in 2026, the two countries are working closely to finalize a Free Trade Agreement (FTA) that could significantly strengthen their economic partnership.
In an interview held at the Embassy of Malaysia in Seoul on Mar. 17, Ambassador Mohd Zamruni bin Khalid called the ongoing FTA negotiations a major milestone that will shape the future of bilateral ties.
"Since the Malaysian Prime Minister’s visit to South Korea in November last year, we have essentially reset the relationship," said Ambassador Zamruni. "We hope that the South Korean president will reciprocate the visit in the near future."
During the 2023 summit, Prime Minister Anwar Ibrahim and President Yoon Suk Yeol agreed to upgrade ties to a strategic partnership, committing to closer cooperation in trade, investment, green energy, the digital economy, and the defense industry.
South Korea is currently Malaysia’s eighth-largest trading partner, while Malaysia ranks 12th for South Korea. Bilateral trade reached approximately USD 20 billion (2.9 trillion won) in 2023.
Although that marked a slight decline from the previous year, largely due to currency fluctuations, Ambassador Zamruni voiced optimism about the FTA's impact. "We believe that once the FTA is signed, we could double or even triple that number," he said.
The Malaysia–South Korea FTA is expected to complement the existing ASEAN–Korea Free Trade Agreement, which has been in place since 2010. While the ASEAN-wide deal already covers many sectors, the bilateral FTA is aimed at deepening cooperation, reducing tariffs, and expanding access in areas such as semiconductors, digital technologies, and halal products.
"We have passed some major obstacles in the negotiations. Now we are fine-tuning the remaining issues," said the ambassador, adding that both countries are targeting an agreement by October or November this year.
He also highlighted Malaysia's strategic role as a regional hub for ASEAN, making it an ideal gateway for Korean businesses. "Geographically, Malaysia sits right in the middle of Southeast Asia. It’s a natural hub for companies looking to expand into the region," he said.
That location, combined with a pro-investment environment, has already attracted major tech companies like Amazon, Microsoft, and NVIDIA, which together have poured over $16 billion into Malaysia’s data centers and digital infrastructure.
Semiconductors are at the center of the bilateral economic agenda. Malaysia launched its National Semiconductor Strategy in May 2024, aiming to become a global hub in the industry. "We are deeply intertwined with South Korea in the semiconductor supply chain," the ambassador noted. "We provide raw materials and components, while South Korean firms contribute advanced processing and technology. The FTA will strengthen this interdependence."
Clean energy is another emerging area of collaboration. Malaysia is reviewing its legal framework to explore nuclear energy through small modular reactors (SMRs), while also pursuing partnerships in hydrogen and carbon capture. "We know many Korean companies are strong in clean energy technologies. We want to tap into that expertise," Ambassador Zamruni said.
The FTA also covers halal products, where Malaysia is already a global leader in certification for food and cosmetics. The ambassador emphasized that halal is not limited to religion but also reflects high standards of cleanliness and safety.
"Many South Korean companies export halal-certified products abroad, but not within South Korea. We believe there is room to expand the halal industry here," he said, pointing to SPC’s recent investment in a halal production facility in Malaysia aimed at markets in the region and the Middle East.
Cultural and people-to-people ties are also helping to drive momentum in the relationship. Nearly 300,000 Malaysians visited South Korea in 2024, and the Malaysian Embassy in Seoul is preparing for more cultural events this year ahead of Visit Malaysia Year in 2026. "We want to introduce Malaysia's diverse culture to the South Korean public, especially the youth," the ambassador said.
Despite global uncertainty, Ambassador Zamruni expressed confidence in South Korea’s democratic institutions and societal resilience. "I truly believe in Korea’s institutions and the strength of its people. Even in difficult times, this country has always found its way forward," he said. "Malaysia continues to look to South Korea as a brother nation and a valuable partner."
As the Malaysia–South Korea FTA nears completion, both sides are signaling readiness to open a new chapter in economic and strategic cooperation. "This FTA will not only benefit our governments, but also our businesses and people. It is a foundation for future growth," the ambassador said.
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