The launch of negotiations follows an impasse in talks between the EU and the Association of Southeast Asian Nations (ASEAN) that began in 2007.
EU Trade Commissioner Karel De Gucht said a deal would “provide Malaysia with quality investment from Europe and open up new market opportunities for Malaysian and European businesses.”
However, observers say a number of difficult issues lie ahead. Malaysia’s affirmative action policies for ethnic Malay may prove particularly troublesome as they would violate standard investment provisions that prohibit local performance requirements including hiring quotas.
Meanwhile, some European politicians and civil society organizations are calling for a halt to all EU negotiations with Asian countries.
At a meeting in Brussels earlier this month, politicians and representatives of NGOs from Europe and Asia met to discuss alternatives to free trade.
“It is clear that FTAs are not in the interests of workers and the poor, that they serve the needs of big business in Asia and Europe,” Irish MEP Joe Higgins said.