"We have had crises before, and we have always emerged from them stronger and with new energy," comments EU ambassador to Malaysia Vincent Piket.
" The EU will have a big job to do in 2012, on our sovereign debt, on the management of the euro zone and on creating growth. Rest assured that the EU will deliver on it, for our own sake, and for our relations with our long-standing partners, including Malaysia."
What does it mean for EU-Malaysia trade? Piket views the impact as being small.
Both the trading partners have enjoyed a resilient economic relationship, and trade and investment have bounced back. For instance, after a depressed 2009, Malaysian exports to the EU rose by 40 per cent in 2010 to hit an all-time high of ?32 billion (RM 130 billion).
With a bilateral EU-Malaysia free trade agreement (FTA) poised to take shape this year, Piket said traders on both sides are looking forward to the conclusion of a comprehensive trade pact which is expected to boost Malaysia's gross domestic product by 8.0 per cent by 2020.
The prospect of the FTA will also help attract European firms to Malaysia.
He felt that although 2012 might see a dip because of the global economic climate, Malaysia's steady market liberalisation, especially in the services sector, will draw fresh interest.
Green investment is going to be the frontier, and European firms with their green thinking will be able to make a great contribution either through trade or investment and joint ventures.
With CO2 cuts up to 95 per cent by 2050, collaboration with partners abroad is necessary, and Malaysia stands as an emerging, upper-middle income country partner.
"For that reason I am very glad that we have built up a very close dialogue with the key 'green ministries': Green Technology and Energy, Environment and Natural Resources, Commodities and Plantation Industries, MOSTI, as well as the EPU. "
Piket recently held hands-on meetings and concrete discussion on how EU firms can contribute to the greening of Malaysia's economy.
He also said that the overall feedback from the 2,000 European companies in Malaysia towards the Economic Transformation Programme has been positive.
"The businesses, however, report some issues with policy coherence - in which the objectives of the NKEAs (National Key Economic Areas) do not seem to match existing laws and regulations that limit market of unequal conditions for foreign players," he said, referring to retail, financial services, and some of the professional services.
With bilateral trade, there will be challenges that need to be addressed and Piket hopes there will be progress on the timber exports front, before the EU Timber Regulation comes into force in March 2013.
The timber agreement will provide a platform for further EU-Malaysia cooperation on forestry.
By Rupa Damodaran, btimes.com.my
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