KUALA LUMPUR: Malaysia-Europe trade will not be significantly affected if Britain choses to exit the European Union (EU) as the country is not Malaysia’s main trading partner in the union, said Malaysia External Trade Development Corporation (Matrade) chief executive officer Datuk Dzulkifli Mahmud.
He said Britain was the third largest destination for Malaysian exports in Europe after the Netherlands and Germany.
“For now, I don’t see any significant impact, but if Britain really leaves the EU, there is the possibility of other elements surfacing that may influence bilateral trade between Malaysia and Britain,” he said after breaking fast with ambassadors from Islamic countries on Tuesday.
Dzulkifli said the impact from the so-called “Brexit” would have to be looked at over a period of time.
The issue will have some impact on the movement of the pound sterling and that may have a positive or negative impact on Malaysia.
If the pound sterling were to depreciate, it would reduce cost for parents who have children studying in the UK, but it may affect the revenues of Malaysian real estate companies.
“It’s difficult to anticipate what the impact will be. Britain still has its own attractions, especially for real estate investors,” he said.
Dzulkifli said if the referendum resulted in Britain leaving the EU, Malaysia might establish a separate free trade agreement (FTA) alongside the Malaysia-EU FTA.
If Britain exits the EU, the country could then impose taxes on imports and this would make it uncompetitive.
However, whatever the decision that will be announced tomorrow, the two-way trade between Malaysia and Britain is expected to remain intact.
Malaysia’s trade with EU grew 3.1 per cent to RM148.52 billion last year.
Exports to EU rose 8.4 per cent, or RM6.09 billion, to RM78.92 billion, with exports to the UK expanding 17.6 per cent. Bernama