Australia signs free-trade deal with Malaysia
May 22, 2012
The Australian Federal Government has signed a free-trade agreement with Malaysia that will strip away trade tariffs and encourage investment.
The Department of Foreign Affairs says the agreement will see Malaysia cut tariffs on 99 per cent of Australian imported goods by 2017, and Australia will eliminate all tariffs on Malaysian imports.
After seven years of negotiating, the agreement will reduce tariffs on dairy, automotive, food manufacturing, wine and iron and steel products.
Malaysia is Australia's third-largest trading partner in South-East Asia and 10th biggest worldwide.
Two-way trade in goods and services reached $16 billion in 2011.
Australia has several similar agreements with Singapore, Thailand and the United States, and bilateral negotiations with China, Japan and South Korea are under way.
Trade Minister Craig Emerson described the deal with Malaysia as "a platinum agreement" in trade liberalisation.
"I know the business community in both countries value this agreement," he told reporters.
A statement released by his office said the deal "will further integrate the Australian economy with the fast-growing Asian region, benefiting Australian exporters, importers and consumers."
Malaysian trade minister Mustapha Mohamad hailed the deal as historic.
"Australian exporters to Malaysia will also be able to immediately enjoy significantly reduced tariffs for goods, reaching up to 99 per cent by 2020," he said at a signing ceremony with Mr Emerson.
The agreement also allows Malaysian investors to participate in Australian private hospital services including massage, homeopathy and traditional medicine.
Malaysia, meanwhile, has agreed to allow 100 per cent equity holdings by Australian entities in the Malaysian education and telecommunication sectors, and 70 per cent holdings in the Malaysian insurance and investment-banking sectors.
Malaysia is currently worth around $1 billion to Australia's agricultural exporters, and is the fourth largest buyer of Australian sugar and the fifth largest wheat buyer.
The National Farmers Federation (NFF) hopes the agreement will bring it closer to deals with bigger countries like China.
The NFF's Duncan Fraser says the deal shows a with China is possible.
"You can learn from that and how to go about forging agreements and dealing with some of the sensitive issues with agricultural products that have been a barrier in the past, especially in the area of say rice and dairy," he said.