Free Trade Agreement Between Norway and Malaysia

Malaysia is doing feasibility studies to see whether it could embark on a free trade agreement (FTA) with the European Free Trade Association (EFTA) by mid next year, according to the online media, thestar.com.

The EFTA consists of Norway, Liechtenstein, Iceland and Switzerland.

Malaysia had already signed a joint declaration on economic cooperation with EFTA on July 20, 2010 in Geneva, Switzerland. The areas of coorperation are medical devices, small and medium enterprises, green technology, financial services and pharmaceuticals.

At a Norwegian roundtable meeting yesterday, the International Trade and Industry Minister Datuk Seri Mustapa Mohamed revealed that Norway’s pension fund, The Norwegian Pension Fund Global, has invested some RM2.4bil (RM7.2bil) in 103 Malaysian listed companies.

Responding to a question from a representative of a Norwegian company, he said Malaysia’s services sector was gradually being opened up.

“There will be further announcement on the liberalisation of the sector during our budget presentation on Oct 7. There will be another major announcement on foreign participation. Our Prime Minister will make the announcement during his budget speech,” he said to thestar.com.

On the availability of blue collar workers in Malaysia, Mustapa said the country would continue to require foreigners although it would try to substitute them with locals.

There are now three million foreign workers out of the total workforce of 11 million. A majority of the foreigners are blue collar workers. “This is a challenge and we are trying to change the system,” Mustapa said.

As at Dec 31, 2010, foreign direct investment (FDI) from Norway to Malaysia amounted to US$72.36bil (RM217.08bil). This ranks Norway seventh in terms of FDI among the European countries. Meanwhile, realised investments to Malaysia amounted to US$525mil (RM1.58bil).

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