MALAYSIA and the Republic of Korea (ROK) have concluded negotiations for the Malaysia–Republic of Korea Free Trade Agreement (MKFTA), a landmark deal expected to elevate bilateral trade and investment while enhancing regional economic resilience
The Joint Statement marking the conclusion of negotiations was signed by Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz, and South Korea’s Minister for Trade, Yeo Han-koo, on the sidelines of the 47th ASEAN Summit in Kuala Lumpur.
The MKFTA covers a broad range of sectors, including goods, services, investment, customs facilitation, sanitary and phytosanitary measures, digital trade, the green economy, bioeconomy and economic cooperation. Malaysia has identified the chapter on Economic Cooperation and Capacity Building as a key focus area of the agreement.
Once in force, the agreement will secure long-term duty-free access for Malaysian exports across strategic sectors such as food and agriculture, herbal and extract products, palm oil and cocoa-based commodities, petrochemicals, and timber and plywood.
In conjunction with the MKFTA, both countries also concluded a Memorandum of Understanding on Strategic Cooperation on Supply Chains, aimed at strengthening economic security through collaboration in supply chain resilience.
Tengku Zafrul said the bilateral FTA was “timely” given the strength of Malaysia–Korea trade relations and the need to diversify markets amid global uncertainties.
“Malaysia perceives the bilateral Free Trade Agreement with the Republic of Korea as timely, given the magnitude of our existing bilateral trade relations. We see numerous opportunities to forge closer collaboration with Korea in the fields of industrial development, trade and investment.
“I am pleased to share that we will also be exploring other sectors such as the green economy, digital and bioeconomy, which would elevate the value of our FTA to different stakeholders. We are also hopeful that the MKFTA will be beneficial to both countries’ SMEs and businesses,” he said.
The MKFTA represents Malaysia’s 19th free trade agreement, reinforcing its commitment to a rules-based multilateral trading system anchored by the World Trade Organization.
The deal is expected to strengthen Malaysia’s strategic partnership with South Korea through deeper trade and investment cooperation.
In 2024, South Korea ranked as Malaysia’s eighth-largest trading partner, with total trade amounting to US$24.01 billion (RM109.68 billion).
Malaysia’s key exports to South Korea included electrical and electronic goods, liquefied natural gas, petroleum products, metal manufactures, and scientific instruments, while major imports comprised petroleum, electronic products, chemicals, machinery, and steel.
Since 1980, South Korean investments in Malaysia have reached RM61.9 billion, generating more than 83,000 jobs. Under the new agreement, Malaysian professionals such as accountants, auditors, lawyers, and engineers are also expected to gain enhanced access to the Korean market.
The MKFTA features a strong framework for economic cooperation and capacity building, targeting growth in industries such as manufacturing, aquaculture, engineering, science and technology, bioeconomy, green mobility, digitalisation, pharmaceuticals, and human capital development.
Acknowledging Korea’s leadership in digital innovation, Malaysia hopes to draw lessons from its policies and best practices while developing future cooperation in key growth sectors. - October 27, 2025
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