Wiberg said the trade relationship between the two nations showcased a healthy balance in 2023, with Swedish exports to Malaysia reaching about US$388 million while imports from Malaysia amounted to US$449 million.

“This trade (balance) reflects a diversified exchange, with Swedish exports to Malaysia largely consisting of machinery and mechanical appliances (29%); vehicle parts including railway parts (13%); equipment within vehicle sectors (12%); and pharmaceutical products (11%),” he said.

Swedish imports from Malaysia primarily included electrical machinery and equipment (19%); rubber and related products (14%); vegetable fats and oils (13%); as well as chemical products (13%).

“We have a robust economic exchange in industries such as manufacturing, technology, green energy, and telecommunications. After the pandemic, we have seen increased economic ties with cooperation in green technology, digital innovation and high-tech manufacturing,” he added.

Focus on the semiconductor sector

When asked about potential sectors for growth, Wiberg highlighted the semiconductor industry as a key area of growth for both countries, noting Sweden’s rising demand for Malaysian semiconductors and integrated circuits.

“I think the semiconductor area for Malaysia is perhaps an area that has been most visible where we see alternatives coming forward to the market we traditionally have had.

“There is also a great deal of competence and experience from Swedish companies within the semiconductor industry, and they are also looking at areas around Penang for further investments because this cluster has grown stronger in Malaysia,” he said.

“This is crucial for maintaining and developing Sweden’s own technology and manufacturing sectors in both Malaysia and Sweden, as well as for companies from Europe that are looking for alternatives,” he added.

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The ambassador also noted that Malaysia is an appealing location for companies aiming to diversify and strengthen the resilience of their value chains or rather de-risking to diversify trade.

“We cannot rely on trade with one partner, but we have to seek several countries that have the same competence. It does not only apply to China; it applies to many countries around the world, as COVID-19 and the war in Ukraine have taught us that we must be reliable and therefore rely on several partners in order to safeguard the critical value chains,” he said.

Malaysia was able to sustain its supply of crucial semiconductor components and automotive chips to certain countries during the Covid-19 disruptions, compared to the manufacturing capacity of semiconductors in Europe.

Swedish investments and employment in Malaysia

Currently, the largest Swedish companies operating in Malaysia include IKEA, SIBS, Ericsson, Essity, Aptilo Networks, Mölnlycke, ABB, Sandvik, Volvo Trucks, Volvo Car, and Scania.

Wiberg noted that these companies collectively generate around 7,000 jobs in Malaysia, mainly in high-tech and capital-intensive sectors.

“These companies’ focus has shifted towards innovation and science, playing a vital role in Malaysia’s industrial processes,“ he said.

Future prospects and trade agreements

Wiberg expressed optimism about the future of bilateral trade relations, particularly with the impending resumption of negotiations on the stalled Free Trade Agreement (FTA) between the European Union (EU) and Malaysia.

“We believe that this is a crucial step that can lead to mutually beneficial negotiations on sustainability and other important issues,“ he said.

The renewed dialogue offers an opportunity to strengthen economic ties and support the transition towards greener technologies and digital innovation.

As such, Wiberg said Swedish companies are well-prepared to lead this transition, underlining the importance of regional trade agreements within a European framework.

On March 22, Prime Minister Datuk Seri Anwar Ibrahim, during his official visit to Germany, had said that it was about time for Malaysia and the EU to rekindle discussions on an FTA to further strengthen bilateral relations and regional integration.

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Negotiations for the FTA began in October 2010, with eight rounds held until September 2012, but stalled following Malaysia’s reservations over palm oil, procurement policies, subsidies, and the EU’s sustainability clauses.

Based on EU data, bilateral trade with the EU totalled €44.7 billion (RM218.14 billion) in 2023, making it Malaysia’s fourth-largest trading partner after China, Singapore, and the United States.

Trade between both countries is dominated by industrial products, machinery and appliances.

Wiberg believes that future prospects for bilateral trade and investment are promising, as Malaysia and Sweden work toward enhancing their collaboration and reinforcing their positions in the global economy.