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products to the US. Demand in the ASEAN market is being Pexels
affected by rising inflationary pressure which means consumers
tend to defer spending on non-essential such as furniture.

Rekindling discussions on a Malaysia-EU FTA
The European Union (EU) and Malaysia need to assess
global trends over the last decade before resuming the free
trade agreement (FTA) talks according to media reports of
statements by Timo Goosmann, Deputy Head of the Delegation
of European Union to Malaysia.
In 2010, a FTA was signed by the two parties but was The updating exercise will involve a series of consultations
put on hold after eight rounds of negotiations at Malaysia’s and workshops with government agencies of the Implementing
request. Agencies Coordination Committee (IACC), the Sabah Timber

In March this year, Prime Minister Anwar Ibrahim said Industries Association (STIA), the Timber Association of Sabah
the time is now “ripe” for Malaysia to rekindle discussions (TAS) and timber companies.
on a Malaysia-EU FTA.
Goosmann reportedly said, “I am very optimistic that Financing forest conservation activities
if we find a way to agree on the conditions to start these A non-market-based mechanism, the Forest Conservation
negotiations then we can possibly find a good way on how Certificate (FCC), has been introduced by the Malaysian
to agree on a meaningful FTA that creates opportunities and government to finance forest conservation activities.

prosperity for both sides”. The Minister of Natural Resources and Environmental
Sustainability, Nik Nazmi Bin Nik Ahmad, said the FCC (a
Sabah TLAS to be updated non-market mechanism to channel funds from the private
Sabah’s timber industry is to update its sustainability procedures sector to support forest conservation projects in the country)
to match with the requirements set out in the EUDR. This comes is one of the mechanisms developed by the Malaysia Forest
after the Sabah Forestry Department and the European Union Fund (MFF).
officially launched a partnership to update the Sabah Timber FCCs can be used by companies to meet environmental,
Legality Assurance System (TLAS) to improve competitiveness social and governance (ESG) reporting requirements under
and to enhance environmental governance. the biodiversity topic, said the Minister. Also, the Ministry

Over the past decade the Sabah TLAS has played a of Finance has approved a 10 percent tax deduction for
pivotal role in gaining international acceptance in key timber companies that participate in FCC activities.
trade markets including Europe, Australia, the US, Japan
and South Korea. INDONESIA
The TLAS updating exercise will involve alignment of Upstream and downstream collaboration could boost
the Sabah TLAS with the European Union Deforestation sector performance
Regulation (EUDR). In addition to EUDR the Sabah TLAS will Krisdianto, the Director of Forest Product Processing and

also align with the EU Corporate Sustainability Due Diligence Marketing Development at the Ministry of Environment and
Directive (CS3D). Forestry, said collaboration between upstream and downstream