Australia–Malaysia sign Free Trade Agreement

Economic ties between Australia and Malaysia have been strengthened with the signing of the Malaysia-Australia Free Trade Agreement (MAFTA) in Kuala Lumpur yesterday.

The agreement will act to further integrate the Australian economy into the fast-growing Asian region and will benefit industries including milk, automotives, processed foods, plastics, chemicals and a range of manufactured products, wine, iron and steel as well as rice.

Malaysia is Australia’s 10th largest trading partner, with two-way trade worth $16 billion in 2011. The agreement will open avenues for Australian goods and services into the dynamic Malaysian market and will build on benefits already flowing to the Australian economy from the ASEAN-Australia-New Zealand Free Trade Agreement, which started for Australia and Malaysia in 2010.

Under the accord, Australia will be as well-positioned in the Malaysian market as Malaysia’s closest trading partners in ASEAN, and in some cases better.

The Business Council of Australia (BCA) Chief Executive Jennifer Westacott said the FTA would help open up new opportunities for businesses in established and emerging economic sectors.

“The economic relationship between Australia and Malaysia has tremendous potential, as reflected in the significant recent growth in trade between our two nations,” Westacott said.

“The signing of the FTA is particularly timely given the economic challenges faced by industry.”

Westacott said the BCA was pleased the two governments have made commitments to reduce barriers to trade in goods and services, and to improve the rules relating to investment.

“Importantly, the FTA also allows for further improving arrangements for the movement of people for commercial purposes,” she said.

“Governments, in cooperation with business and industry, need to continue the work of opening up economies to greater trade and investment. This is what enables increased levels of growth and the creation of jobs.

“Removing impediments to businesses investing and doing business across borders is a fundamental way of making the most of Australia’s current and future opportunities in the Asian Century. The Australia–Malaysia FTA provides an example of how this can be achieved.”

The MAFTA will enter into force once Australia and Malaysia have completed their domestic ratification procedures. The earliest the Agreement would take effect is 1 January 2013.

Full details of the agreement are available to download here (pdf).