Malaysia’s Ministry of Investment, Trade and Industry has announced that Malaysia and South Korea have finalized a free trade deal, establishing a modern trade framework that directly benefits the steel and manufacturing industries. The agreement marks Malaysia’s 19th free trade accord and signals a step forward in bilateral economic cooperation.
Steel sector at core of Malaysia-Korea Free Trade Agreement (MKFTA)
Steel is among the key industrial products featured in the agreement. Malaysia and South Korea have agreed to:
- Liberalize tariffs on semi-finished and finished steel products.
- Improve customs facilitation for flat steel, wire rod and alloyed steel shipments.
- Promote joint ventures between mills and component manufacturers in both countries.
- Foster research collaboration on low-carbon steel, hydrogen-based reduction, and carbon-capture-utilization-and-storage technologies.
The inclusion of steel in the MKFTA is expected to create smoother trade flows and enhanced cooperation in industrial upgrading, particularly for high-value manufacturing in the automotive and construction sectors.
Green steel and digital supply chains
Both nations have pledged to build resilient and sustainable supply chains across critical industries. Under the economic cooperation chapter, the MKFTA supports transition to green steelmaking, improving carbon efficiency across mills; use of AI and data-driven logistics in steel distribution; expansion of Indo-Pacific industrial corridors linking Malaysia’s processing hubs and South Korea’s high-tech production clusters.
Industrial cooperation outlook
The MKFTA provides a framework for cross-investment in steel and metal industries. Accordingly, South Korean firms are expected to explore automotive steel processing and electrical steel manufacturing in Malaysia, while Malaysian producers may gain access to South Korea’s advanced green steel technologies and coating expertise. Both countries are set to cooperate on infrastructure steel demand, such as smart ports, energy grids and transport systems.