EU: Anchor of stability amid global trade tensions

Malaysiakini

28-07-2025

COMMENT | In a world where trade tensions are rising and protectionism is creeping back, the European Union is doubling down on its commitment to free trade and international cooperation.
European Commission president Ursula von der Leyen put it plainly: 'Tariffs are taxes that only hurt businesses and consumers.'
This straightforward message reflects the EU's firm belief that walls and barriers won't help anyone in the long run.
The EU's robust legal framework, enforced by EU member states, the European Commission, and the Court of Justice, ensures that international trade follows clear, agreed-upon rules.
These rules, grounded in the principles of the United Nations and the World Trade Organization, are not just about trade. They promote prosperity, cooperation and stability worldwide, including in the fast-growing and strategically vital Indo-Pacific region.
While some countries might be tempted to retreat behind protectionist policies, the EU is keeping its doors open, especially towards Southeast Asia.
This openness is based on a simple conviction: that fair, rules-based trade and investment are powerful engines for sustainable growth and development.
This is exactly how peace and prosperity in the EU were built over the past decades. Now, this belief is driving a renewed effort to conclude an ambitious, comprehensive and balanced free trade agreement (FTA) with Malaysia.
Partners in stability and prosperity
The partnership between the EU and Malaysia, as well as with Asean, is built on trust, transparency, and a shared vision for peace, stability, and prosperity.
And on mutual engagement, as evidenced by the renewed dynamics in our partnership with the visits of Prime Minister Anwar Ibrahim – also as Asean chair – to Brussels, Rome and Paris in the past months, as well as the visits to Kuala Lumpur by the Poland president, Denmark foreign minister, Finland trade minister and most recently the EU high representative and vice-president of the commission on the occasion of the 58th Asean Foreign Ministers Meeting.
Stability and predictability are vitally important for business and the global economy. The recent relaunch of trade negotiations reflects our shared commitment to an open, rules-based international trade order – a principle Anwar has consistently advocated, and that both sides strongly uphold.
The highly promising first round of EU-Malaysia trade negotiations has just concluded in Brussels, the substantive engagement from both sides signalling a fresh push to deepen economic ties.
These ties are already significant: the EU is Malaysia's fourth-largest trading partner and second-largest source of foreign direct investment.
For the EU, Malaysia ranks as its third-largest trading partner in Asean. But there's plenty of untapped potential, and the free trade agreement is key to unlocking it.
By slashing tariffs and removing non-tariff barriers, the agreement would open up markets for goods, services, investment, and procurement flows.
It would also provide clearer rules on intellectual property and digital trade - areas that are increasingly important in today's economic landscape.
Freer trade also helps cushion the impact of global supply shocks by diversifying sourcing and reducing dependence on any single country or supplier.
For consumers both in the EU and Malaysia, the benefits are tangible: lower prices, more choice, and greater supply security, especially in essential sectors like food, medicine, and technology.
For Malaysian businesses, this means preferential and easier access to the EU's vast single market - the second-largest in the world - creating new opportunities, boosting competitiveness, and attracting high-quality investment.
FTA to strengthen ties
Ultimately, the FTA is more than just a commercial tool - it is a platform to shape a future-oriented, resilient relationship that reflects the shared ambitions of Malaysia and the EU for sustainable and inclusive growth.
It will further strengthen the foundation of our relationship, built on trust and mutual benefit.
In a time of growing trade tensions and geopolitical uncertainty, the EU's commitment to open markets and international rules provides an anchor of stability.
As a predictable, transparent, reliable and open partner, the EU is ready to deepen its engagements with the like-minded.
The renewed EU-Malaysia free trade talks highlight how cooperation, not confrontation, can pave the way for a more prosperous future for both regions and the global economy.
RAFAEL DAERR is EU ambassador to Malaysia. This op-ed is also jointly written by 16 ambassadors of EU member states in Malaysia.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.