Notice Board 

Malaysian Free Trade Agreement Developments

Bilateral free trade agreements (FTAs) are made between two countries. Throughout the world, many governments have signed, are negotiating, or contemplating new bilateral free trade and investment agreements. 

They are based on assumptions that free trade and the removal of regulations on investment will lead to economic growth, the reduction of poverty, increased living standards and employment opportunities. Like other free trade and investment agreements, they work towards removing all restrictions on business. 

Malaysia is currently pursuing The Free Trade Agreements (FTAs) or

Closer Economic Partnership (CEP) agreements with selected countries.

Japan, Malaysia Agree To Expedite FTA Talks

Japan and Malaysia agreed to strive to reach a basic agreement on concluding a bilateral free trade agreement by late May. 

Major stumbling blocks exist in talks to liberalize trade in auto parts, steel, and investment and services. Japan has been urging Malaysia to review its protective policy for the domestic automobile industry in past FTA talks.  

Japan already has a free trade agreement with Singapore, and is negotiating similar accords with the Philippines and Thailand. 

Malaysia-Pakistan FTA Will Be Sealed Year-End 

Prime Minister Datuk Seri Abdullah Ahmad Badawi is confident the proposed Free Trade Agreement (FTA) between Malaysia and Pakistan will be sealed by the end of the year.

Besides trade, Malaysia also pledged to extend closer cooperation with Pakistan in various sectors, among others, in tourism, information technology, communication, science and technology and aviation.

Malaysia recommended for FTA talks with US

MALAYSIA is among five countries that the National Association of Manufacturers (NAM) has recommended that the US administration explore the possibility of FTA with. The other four countries are Egypt, India, New Zealand and South Korea.

In a report, NAM placed another five - Brazil, China, European Union, Japan and Taiwan - on the “FTA Watch List”, believing that it was not time yet to recommend them for active consideration.

The association, headquartered in Washington DC, is the nation’s largest industrial trade association representing small and large manufacturers in every industrial sector in all 50 states. It undertook a quantitative analysis of all countries to which US exported at least US$1bil in manufactured goods annually, and after eliminating countries that already had FTAs, found there were only 18 trading partners in this category.

The top 10 countries in this group were Brazil, China, Egypt, The European Union, India, Japan, Malaysia, New Zealand, South Korea and Taiwan.

NAM said Malaysia’s strong economic growth and large bilateral tariff disparity made it an interesting FTA candidate from a manufacturer’s view point. Malaysian tariffs on US manufactured goods average 6.6% - seven times as high as the 0.9% average US tariff on imports from Malaysia. The average US import duty on imported manufactured goods was 1.8%, and excluding textiles and apparel, was only 0.9%.

Trade and Investment Framework Agreement (TIFA) were signed on 10 May 2004. The TIFA provides a basis on which to enter into discussions of trade issues and on detailed discussions of a bilateral trade agreement.

Malaysia-Australia FTA on the Way

On 7 April 2005, Prime Minister John Howard and Malaysian Prime Minister Dato' Seri Abdullah Ahmad Badawi, launched negotiations on a bilateral Free Trade Agreement (FTA). Negotiations are expected to be completed by mid-2006.

Australia is Malaysia’s 11th largest trading partner. Total trade in 2004 amounted to US$5.9 billion with exports valued at US$4.1 billion and imports valued at US$1.8 billion. Malaysia-Australia trade has been expanding at an annual rate of 12.4% during the period of 1994 to 2004.

The Australian Department of Foreign Affairs and Trade (DFAT) has been inviting public submissions and comment on issues for the negotiation of a Malaysia-Australia FTA. 60 written submissions were received from a wide range of industry, State Government and non-government groups

Malaysia-New Zealand FTA by End of This Year

MALAYSIA and New Zealand have rescheduled the signing of a free trade agreement to the end of the year, six months ahead of the June 2006 deadline. 

The agreement is expected to lead to a progressive liberalisation of trade between the nations. It is also expected to see, among other things, a reduction and eventual elimination of all tariffs and non-tariff restrictions, simplification of Customs and Immigration procedures and promotion of joint investments. 

This will mean cheaper goods for both sides besides greater opportunities to work together in education, construction, engineering, tourism and health.

Malaysia Looks Beyond FTA with India

India and Malaysia are on the verge of signing a comprehensive economic co-operation agreement by year-end. It will include free trade between the two nations. The signing may be done during a visit by Indian Prime Minister Dr Manmohan Singh to Malaysia in December.

Both Governments had agreed to fast track the agreement. The joint study is expected to be ready by September, when both sides would probably address the final draft of the agreement. Malaysia would make adjustments to suit the needs and circumstances of both nations.

Malaysia-Korea FTA to be Considered

A decision to pursue bilateral FTA negotiations between Malaysia and Korea was made following the Malaysian Prime Minister's visit to Korea in August 2004.

Both sides expressed their hope that Korean investments in Malaysia will be increased and trade activities be expanded. PM Badawi said even with the FTA, Malaysia still supports efforts towards a strategic cooperation agreement between the RoK and ASEAN.

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