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Ministry of International Trade and Industry Malaysia Official Blog


Posted by admin2 on June 22, 2015 at 3:41 pm
YB Dato Sri’ Mustapa Mohamed, Minister of International Trade and Industry Malaysia and the Hon Dr. Craig Emerson MP, Australian Minister for Trade and Competitiveness, signed the Malaysia-Australia Free Trade Agreement (MAFTA) today in Kuala Lumpur. The Free Trade Agreement will come into force on the 1st of January 2013.

The signing of the MAFTA, which complements the ASEAN-Australia-New Zealand Free Trade Agreement, marks another important milestone in Malaysia and Australia economic relations. The Malaysian trade minister is confident that this agreement will benefit both countries. “I am happy to note that Malaysia will benefit from this Agreement, particularly in the area of goods where this is the first FTA Malaysia is signing that will grant our exporters duty free treatment for 100% of our goods as soon as the Agreement comes into force on 1st January 2013. Australian exporters to Malaysia will also be able to immediately enjoy significantly reduced tariffs for goods, reaching up to 99% by 2020”, said Dato’ Sri Mustapa Mohamed.

“I should stress that MAFTA covers other areas too, such as trade in services, investments as well as economic and technical cooperation. If we can properly exploit the potential in all these areas of business, this will certainly take our bilateral relations to a whole new level.” the Minister added. The Malaysia trade Minister is optimistic to enhance strong trade and investment linkages with Australia and hope that both the Malaysian and Australian business communities will make use of the mutual benefits as outlined in the Free Trade Agreement.

Negotiations on MAFTA commenced in May 2005 but paused in 2006 to enable both countries to focus on the ASEAN-Australia-New Zealand FTA (AANZFTA), and resumed only in August 2009. Negotiations were intensified after the Prime Ministers of both countries agreed in March last year that negotiations should be concluded within a year. After 11 rounds of negotiations, MAFTA was concluded on 30 March 2012 in Kuala Lumpur.

MAFTA is Malaysia’s sixth bilateral free trade agreement after Malaysia-Japan (2005), Malaysia-Pakistan (2007), Malaysia-New Zealand (2009), Malaysia-Chile (2010) and Malaysia-India in 2011. It encompasses liberalisation of trade in goods and services, facilitation of investment, as well as enhancement of bilateral economic cooperation.

On trade in goods, Malaysia and Australia have agreed to reduce or eliminate tariffs on their respective industrial and agricultural products. Upon entry into force of the MAFTA, Australia will immediately eliminate its import duty on all goods originating from Malaysia. With this preferential tariff treatment, Malaysia producers and exporters will be in a better position to compete in the Australian market especially for items such as iron and steel products, plastic products, apparel and clothing and wood products.

Malaysia will progressively liberalise its duties for 10,295 tariff lines or 99% of its goods by 2020:

•    Import duties on most products will be eliminated immediately upon entry into force of the agreement. These cover products such as paper, textiles and automotive components;

•    The import duty on 357 products  will be progressively reduced and eliminated by 2020. These cover products such as automotive vehicles, iron and steel products and fruits.

To further promote and facilitate trade and investment in the services sector, both countries offered commitments to liberalise selected sectors. Malaysia’s offers cover commitments in sectors such as:

•    Education and Private higher education:
–    Up to 100% equity holdings allowed

•    Telecommunication:
–    Up to 100% equity holdings allowed

•    Financial:
–    Equity holdings up to 70% in insurance companies and investment banks;
–    Equity holdings up to 100% in investment advisory companies and up to 70% in both corporate finance advisory and financial planning companies; and
–    A higher number of Australian expatriates with senior managerial and specialist skills is offered for the banking, insurance and capital market sub-sectors.

Australia’s offers include:

•    Allowing Malaysian participation in private hospital services.

•    Facilitating Malaysia’s participation in providing traditional and complementary medicine services (Malay massage, homeopathy, Ayurveda and traditional Chinese medicine).

MAFTA also provides a framework to further facilitate cross-border investments between Malaysia and Australia through commitments on non-discrimination as well as protection of investors and investments.  This enabling environment will further encourage two-way investments.

In addition to liberalisation commitments in goods, services and investment, both countries agreed to undertake economic and technical cooperation with particular attention given to the following areas:
•    automotive;
•    agriculture
•    tourism;
•    clean coal technology; and
•    e-commerce.

The text of MAFTA as well as schedules of goods and services offers is available on MITI’s website at

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