The Impact of the EU Carbon Border Adjustment Mechanism (CBAM) on Global Trade Order and Legal Challenges: A Case Study of Malaysia

Abstract

As a significant player on the global trade stage, the EU’ s Carbon Border Adjustment Mechanism (CBAM) influences the international trade landscape, global economic growth, and the formulation of trade rules, presenting opportunities and challenges to countries worldwide and driving changes in the global trade structure and economic adjustment. Malaysia, a major global exporter of aluminum, steel, and palm oil, is significantly affected by CBAM in its exports to Europe. CBAM increases the export costs of related products, weakening their competitiveness in the EU market, while also prompting Malaysia to accelerate its green transition. Its response measures provide a reference for other developing countries and have a domino effect on the global trade order.