Forests cover almost 60% of Malaysia’s land area, equivalent to 18.48 million hectares. Timber is an important export product and a significant contributor to the country’s economy. Between 1990 and 2000, forestry and timber contributed 6 to 7% of the country’s annual GDP. However, this contribution fell to 2 to 3% between 2001 and 2015. The range of Malaysia’s timber and timber products, from primary to tertiary products (logs, sawn timber, plywood, medium density fibreboard, chipboard, veneer and other panel products, mouldings, builders’ carpentry and joinery, and furniture) is unsurpassed.  

The EU is one of Malaysia’s top three export markets (10.1%) in terms of value (in 2018) for timber products. The country also has many regional timber trading partners, the main importers being India and Japan. More than half of Malaysia’s export markets are in Asia (61.9%). The other Asian markets are China, Chinese Taipei, Singapore, South Korea and Thailand. The United States takes up 20.1% of its timber exports.

Malaysia was one of the first countries to begin negotiating a Voluntary Partnership Agreement (VPA) with the EU, in 2007. The Malaysia-EU VPA negotiations are the most protracted VPA negotiations to date, partially due to the complexity of Malaysia’s political situation. The country consists of three regions, Peninsular Malaysia, Sabah and Sarawak (the latter two in Borneo). These regions are often treated separately as they have distinctly separate laws and histories. The pluralistic nature of the Malaysian legal system, and the fact that land and forest regulations are decentralised to the state levels (11 states in Peninsular Malaysia plus Sabah and Sarawak), makes for the complexity.   

Eleven negotiation meetings (Technical Working Group meetings) and six Joint Experts’ Meetings took place between 2007 and 2014. However, negotiations have been in limbo since late 2014, while the EU awaits a signal from Malaysia that it is ready to restart the negotiations with the inclusion of the state of Sarawak.