Malaysia-Turkey Free Trade Agreement (MTFTA)

Background

• The decision to explore the feasibility of having an FTA was made through several meetings held between Malaysian officials and Turkish officials since late 2009. On 5 August 2009, officials from the Turkish Embassy in Malaysia conveyed Turkey's proposal to establish an FTA with Malaysia. In another meeting held on 5 October 2009 between MITI and Turkish Embassy officials, Turkey again conveyed their strong interest in establishing an FTA with Malaysia despite the current low level of trade between the two countries as they see huge potential to increase the level of bilateral trade as both the countries could be used as gateways to their respective regional markets.

• On 12 August 2009, Turkey proposed to send a representation from its Under Secretariat of the Prime Minister for Foreign Trade to Malaysia to have exploratory talks on the prospect of establishing an FTA with Malaysia.

• Initial discussions were held between a Turkish delegation and Malaysia from 13 -14 January 2010 in Kuala Lumpur. The discussions focused on information exchange on their respective economic policies, bilateral trade relations and the prospects of strengthening bilateral trade and investment. Both sides also agreed to undertake feasibility study separately on the proposed FTA with a view to reach a decision on the proposed FTA by end April 2010

• The findings of the study on the feasibility of an FTA between Malaysia and Turkey support the FTA with Turkey.

Scope

• Areas being negotiated under the Malaysia-Turkey FTA include :

  • market access;

    • trade in goods;

    • rules of origin (RoO);

    • sanitary and phytosanitary measures (SPS);

    • trade remedies;

    • customs procedures; and

    • technical barriers to trade (TBT).

  • legal issues; and

  • economic cooperation

• Negotiations on Trade in Services will commence one year after the entry into force of the Market Access Agreement.

Status

• To date,  seven Trade Negotiating Committee (TNC) meetings have been held :

  • 31 May–1 June 2010, Ankara, Turkey;

  • 23–25 August 2010, Kuala Lumpur, Malaysia

  • 30 November–2 December 2010, Ankara, Turkey;

  • 9-11 February 2011, Kuala Lumpur, Malaysia;

  • 22-25 March 2011, Ankara, Turkey; and

  • 23 – 26 May 2011, Kuala Lumpur, Malaysia;

  • 18 – 22 July 2011, Ankara, Turkey.

• Discussions on Sanitary and Phytosanitary Measures were concluded during the third round of negotiations while negotiations on Trade Remedies, Customs Procedures and Cooperation, and Technical Barriers to Trade were concluded during the fifth round of negotiations.

• Discussions on Working Groups (Rules of Origin) scheduled to meet from 16-20 Jan 2012 in Kuala Lumpur.

Benefits

• Turkey is an attractive market for Malaysian products as it has a large population base of 71.4 million people and GDP per capita of US$9,950. Malaysia and Turkey can provide advantages to each other as Malaysia has a strategic location within ASEAN while Turkey is a member of the EU Customs Union.

• In 2010, total trade in goods between Malaysia and Turkey amounted to RM2.56 billion (2009: RM2.07 billion). Malaysian exports to Turkey were valued at RM2.11 billion (2009: RM1.7 billion) while imports from Turkey were worth RM445 million (2009: RM396 million). Major exports to Turkey included electrical and electronic products, textiles and clothing, chemicals and chemical products, crude rubber and rubber products. Major imports from Turkey were iron and steel products, chemicals and chemical products, machinery, appliances and parts and electrical and electronic products. Trade in services with Turkey rose threefold between 2008 and 2009. Malaysia's bilateral trade in services with Turkey in 2009 amounted to RM836.4 million, with exports totaling RM489.3 million and imports RM347.1 million. Major services exports from Malaysia were in wholesale and retail, trade, as well as restaurant and hotels businesses. Malaysia's services imports from Turkey focused in the manufacturing-related services.

Contact person:

• MITI welcomes feedback, suggestions and views from all interested parties. The inputs can be forwarded to :

Secretary General
Ministry of International Trade and Industry
Block 10, Government Offices Complex
Jalan Duta,
50622 Kuala Lumpur