MAFTA and beyond:
opportunities for business
Victorian Government Super Trade Mission
Breakfast Briefing
Kuala Lumpur, 17 June 2013
JOHN FISHER
First Assistant Secretary, Free Trade Agreement Division
Department of Foreign Affairs and Trade
1
Overview
• Trade with Malaysia
• Need for a free trade agreement
• Malaysia-Australia Free Trade Agreement (MAFTA)
– Outcomes: goods, services and business facilitation
• Regional agenda
– ASEAN-Australia-New Zealand FTA (AANZFTA)
– Regional Comprehensive Economic Partnership (RCEP)
– Trans-Pacific Partnership (TPP)
2
Trade with Malaysia (2012)
• Australia’s 9th largest trading partner
– two-way trade worth A$17.7 billion annually
Goods
$9.6b
Services
$1.3b
Goods
Imports
from
Malaysia
Exports
to
Malaysia
$10.9b
$6.8b
$5.1b
Services
$1.7b
3
Trade with Malaysia: Top 5
Top 5 imports from Malaysia
Crude
petroleum
Refined
petroleum
Transport
services
AV/TV
equipment
Computers
Top 5 exports to Malaysia
Crude
petroleum
Educationrelated travel
Copper
Recreational
travel
Nickel
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Why an FTA with Malaysia?
• Scoping study identified the need to go further
– eliminate remaining impediments to bilateral trade and
investment
– complement existing commitments (WTO/AANZFTA)
• An opportunity to build a tailored solution
– design measures to improve access for exporters of both
countries
– eliminate additional tariff and non-tariff barriers
– opportunities to boosts investment, output and employment
5
Malaysia-Australia FTA (MAFTA)
• Entered into force on 1
January 2013
• “AANZFTA-Plus”
• Key features
– tariffs and quotas
eliminated or reduced
– increased market access,
including options for
majority ownership in
selected services sectors
Australian Minister for Trade and
Competitiveness, Craig Emerson, and
Malaysia’s Minister for Trade and Industry,
Mustapa Mohamed
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Outcomes at a Glance: Goods
• Automotives and
automotive parts
• Iron and steel
• Processed foods, plastics,
chemicals and a range of
manufactured products
• Milk, wine and rice
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Case study: Hella Australia
• Designs and manufactures
• Under MAFTA:
automotive lighting
– eliminated tariffs on:
equipment and accessories for
• all Malaysian tariffs on
the automotive, mining and
automotive parts and
marine industries
components
• medium to large engine
• Imports some components
cars
including from Malaysia
• Exports finished product to
Malaysia, other ASEAN
countries, China and South
America
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Case study: Milk industry
• Harvey Fresh Milk
– produces fresh juice, dairy
and wine products
– local and foreign markets
– exports one million litres of
fresh milk to Malaysia
• F&N Dairies Sdn. Bhd
• Under MAFTA:
– Malaysia will increase
the volume of its tarifffree quota of liquid milk
from Australia each year
• additional capacity to
AANZFTA commitments
– major manufacturer and
marketer of milk and juice in
Malaysia
– imports 100 per cent
Australian fresh milk
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Case study: BlueScope Steel Malaysia
• Leading supplier of
premium metallic coated
and painted steel building
products
– entered Malaysia in 1996
– seven manufacturing plants in
Malaysia, Singapore and
Brunei
• Under MAFTA:
– tariffs on 96.4 percent of
iron and steel imported
from Australia will be
eliminated by 2016 (100
per cent by 2020)
• Supplier for key projects:
– Legoland, KL International
Airport 2 Integrated Complex,
Pinewood Malaysia Studios
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Outcomes at a Glance: Services
Score based on the number of sectors in which Malaysia took
commitments and the depth of commitment offered
Comparison of services liberalisation commitments in Malaysia's FTAs
100
90
80
70
60
50
40
30
20
10
0
Doha
AANZFTA
AFAS 7
ASEAN-China
ASEAN-Korea
Australia *
Japan
Pakistan
Source: ‘Services Commitments in Preferential Trade Agreements: An Expanded Dataset’, Roy, 2011
(WTO Staff Working Paper ERSD-2011-18) *Commitment to Australia calculated by DFAT applying author's methodology
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Outcomes at a Glance: Services
• Right to acquire majority ownership in a range of
industries, including
–
–
–
–
education
financial
telecommunications
professional
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Case study: University sector
• Monash, Swinburne and
Curtin Universities
– campuses in Malaysia
• Under MAFTA:
– Australian higher education
providers can own up to 70
per cent equity in local
campuses
• increase to 100 per cent by
2015
– Malaysia raised the quota of
Australian lecturers per
institution
• 20 to 30 per cent
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Outcomes at a Glance:
Business Facilitation
• Business-friendly rules of origin provisions
• More Australian executives and senior managers can
work in Malaysia
• Easier for spouses and dependants to obtain visas
• Mutual recognition of qualifications and licensing for
professionals
• Stronger protection of Australian trademarks and
copyright
• Economic and technical cooperation projects
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Case study: Automotive industry
• Malaysia Automotive Institute • Under MAFTA:
(MAI) and Australia's
– established an Automotive
Industry Dialogue to provide a
Cooperative Research Centre
forum for enhanced
for Advanced Automotive
cooperation between
Technology (Auto CRC)
Malaysian and Australian
• AutoCRC Vehicle
automotive industries
Electrification program:
– collaboration between
University of Wollongong,
University of Technology Sydney
and CSIRO and MAI
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Regional Agenda: AANZFTA
•
•
•
•
Entered into force 1 January 2010
Australia’s largest FTA
ASEAN’s most comprehensive FTA
In-built agenda and review to
strengthen outcomes
• Benchmark for other bilateral and
regional FTAs
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Regional Agenda: RCEP and TPP
• Regional Comprehensive Economic Partnership
– Aims to build on existing ASEAN FTAs
– Target completion date of end 2015
– Potential for Australia and Malaysia
businesses
• 30 per cent of global GDP
• regional supply chains
• Trans-Pacific Partnership
– High quality, comprehensive 21st century agreement
– Australia and Malaysia both negotiating parties
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Conclusion
• Full FTA agenda in South-East Asia
• Existing FTAs already helping business access new
markets and expand trade in existing markets in the
region
– business must harness these opportunities
• Current bilateral and regional FTA negotiations will
potentially offer additional opportunities
• More information: www.dfat.gov.au/fta
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