Malaysia Fta Involvement

INTRODUCTION

Malaysia's FTA Involvement

International trade is an important contributor to Malaysia's economic growth and development. Malaysia's trade policy is to pursue efforts towards creating a more liberalized and fair global trading environment. While Malaysia continues to accord high priority to the rule-based multilateral trading system under the World Trade Organization (WTO), it is also pursuing regional and bilateral trading arrangements to complement the multilateral approach to trade liberalization. Apparently, this bilateral trading approach is due to the usual failure of WTO negotiations which threaten the credibility of the multilateral trade system. Accordingly, it has raised the attention of countries to Free Trade Agreements (FTAs).

FTAs have played a central role in this trend towards regional integration. FTAs are generally aimed at providing the means to achieve quicker and higher levels of liberalization that would create effective market access between the participants of the FTA. Traditionally confined to trade in goods, with the establishment of the WTO, trade in services has been included in many FTAs. FTAs, currently pursued with selected countries, are not confined to liberalization and market opening measures alone. They are comprehensive and include investment, trade facilitation, intellectual property rights (IPR) as well as economic cooperation in areas such as competition policy; standards and conformity assessment; information and communication technology; science and technology; education and training; research and development; financial cooperation; Small and Medium Enterprises (SMEs) development; and paperless trading.

Malaysia, for instance, strives for the bilateral and regional trading arrangements in order to be able to gain market access in the international market and remains an attractive location for foreign investment. Malaysia negotiates FTAs to seek better market access by addressing tariffs and non-tariff measures; to further facilitate and promote trade, investment and economic development; to enhance the competitiveness of Malaysian exporters and to build capacity in specific targeted areas through technical cooperation and collaboration.

Currently, Malaysia has already established 6 bilateral FTAs with Japan, Pakistan, New Zealand, India, Chile and Australia. At the regional level and together with ASEAN, apart from ASEAN Trade in Goods Agreement (ATIGA), Malaysia has implemented 5 regional FTAs with Korea, China, Japan, India, as well as Australia and New Zealand. Malaysia’s trade with these FTA partners comprises 62 percent of Malaysia’s global trade in 2012. Other than that, three other FTAs are still under negotiation including the Malaysia-European Union Free Trade Agreement (MEUFTA), the Malaysia-EFTA Economic Partnership Agreement (MEEPA) and the ASEAN - Hong Kong Free