"We managed to achieve a tremendous amount of bilateral trade, in the figure of $16 billion (this year), and in the next five years I am confident we can double this figure," South Korean president Lee Myung-bak told reporters after meeting Malaysian Prime Minister Najib Razak.
A joint statement by the two countries did not indicate when the free trade talks would start, while a Malaysian government official said it was a proposal that would now be subject to a joint study to see if it was feasible as an ASEAN-South Korea free trade agreement is already in effect.
Trade between the two countries in the first 10 months of this year totalled 44.2 billion ringgit ($14 billion) compared to 41.5 billion ringgit ($13.2 billion) in 2009.
South Korea is Malaysia's sixth-biggest trading partner, ahead of Indonesia and slightly below Thailand. Malaysia's bilateral trade with China or Singapore is almost three times higher than what it trades with South Korea.
Lee said South Korea could also team up with Malaysia to invest in other countries, including in Islamic finance.
"Korean companies will have a lot of added value in learning from the Malaysian financial institutions when it comes to the financing and the issuance of bonds," he said.
South Korean government officials said on Thursday that lawmakers had rejected a bill providing tax breaks for sukuk, or Islamic bonds, a measure which bankers said would have helped to develop the sharia banking market (Reuters)
