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Agriculture deal with Malaysia opens door for FTA

The Age, Melbourne

Agriculture deal with Malaysia opens door for FTA

By Philip Hopkins

March 10, 2006

AUSTRALIA and Malaysia have signed a memorandum of understanding that aims to foster trade in agriculture, food processing, livestock and fisheries.

The MoU is separate from the proposed free trade agreement between the two countries, and comes as the United States announced it would begin formal negotiations for a free trade accord with Malaysia.

Australian agricultural exports to Malaysia - sugar, wheat, dairy, meat, wool, wine, and fruit and vegetables - are valued at $860 million. These make up about one-third of Australia’s exports to Malaysia, which were valued at $2.5 billion in 2005. Malaysian exports to Australia were worth $6 billion last year, creating a trade deficit of $3.6 billion, our sixth largest.

Malaysia is Australia’s 12th largest export destination and our seventh largest source of imports. Key imports are cocoa, spices and wood products.

The Minister for Agriculture, Fisheries and Forestry, Peter McGauran, said the agreement would underpin private and government-sector links.

"This will involve training and exchange programs, joint studies, better links between our research and development activities, and information exchanges on natural resource management and water policies," he said.

The National Farmers Federation strongly welcomed the agreement. "Malaysia is an important market for us," a spokesman said. "The Government is negotiating an FTA with Malaysia and we are looking for agriculture to be part of that.

"We are looking to lift not just tariff barriers, but also non-tariff barriers. Building transparency will help us to facilitate trade."

In Washington, US Trade Representative Rob Portman announced the free trade negotiations with Malaysia.

Malaysia is the 10th largest US trading partner, with about $US44 billion ($A60 billion) in trade between the two nations last year.

The US-Malaysia FTA negotiations are expected to take a year to complete as negotiators have to determine cuts to be made in tariffs, rules to govern investment disputes and regulations for safeguarding patents.

The US is already negotiating a trade agreement with Thailand and earlier this year said it would begin talks with South Korea in May.