Malaysia, India To Enter Comprehensive Trade Talks Early Next Year
23 November 2007
KUALA LUMPUR, Nov 23 (Bernama) — Malaysia and India will enter into a comprehensive negotiations on a free trade agreement (FTA) in January next year, International Trade and Industry Minister Datuk Seri Rafidah Aziz said today.
Approval for the negotiations, which will cover trade in goods and services, investment and economic cooperation, came from the Cabinet two weeks ago, she said.
"The decision ensues from a joint study by both governments on the merits of having an FTA," she said in her keynote address at the Ministry of International Trade and Industry (MITI)-Private sector dinner, here.
Based on the study, exports between Malaysia and India under a bilateral FTA could go up by 1.3 times to US$11.85 billion (US$1=RM3.58) for Malaysia, and 2.5 times to US$4.63 billion for India by 2012.
There are 13 potential sectors or areas for both countries to further explore and enhance bilateral collaboration under the FTA.
The areas include information communication technology (ICT) (particularly in software development); biotechnology; education and tourism.
Other sectors include transport; human resource development; healthcare; pharmaceutical; cooperatives; energy; small and medium enterprise (SME) development; Intellectual Property Rights (IPR); and agriculture.
Currently, Malaysia is engaged in a number of bilateral negotiations for FTAs such as with the United States (U.S), Australia, New Zealand and Chile.
Turning to the regional level, Rafidah said apart from the comprehensive FTA negotiations with Japan, Australia and New Zealand, the Association of South East Asian Nations (Asean) is also having negotiations on investment with China and South Korea.
The negotiations as part of an overall FTA to be entered into in the future, she said.
"With India, negotiations so far only include trade in goods, while preparations are on-going with the European Union for the commencement of negotiations for an FTA," she added.
On the local front, she said Malaysia has successfully positioned itself as a global exporter and a conducive investment location.
She said Malaysia’s total external trade in 2006 surpassed the RM1 trillion mark to reach RM1.07 trillion.
For the first nine months this year, Malaysia’s total trade reached RM810.5 billion, an increase of 1.8 per cent, compared with RM795.9 billion the same period in 2006.
She said the country recorded a trade surplus of RM108.2 billion last year, an increase of 8.4 percent over RM99.8 billion recorded in 2005.
Malaysia has also been successful in attracting prominent companies to set up their regional headquarters in the country.
Up to September this year, approvals were given to establish 2,389 new regional operations in Malaysia involving business spending of RM7.14 billion per annum.
The approvals include 145 operational headquarters (OHQ), 201 international procurement centres (IPC), 17 regional distribution centres (RDC), 624 regional offices (RO), and 1,402 representative offices (RE).
Hence, Rafidah said that the government will continue to engage with trading partners in evolving closer economic partnerships and free trade arrangements to seek further enhance market access opportunities for Malaysia.
"The FTAs provide a more predictable environment and facilitate investment," she said.
The trade capacity building programmes will further facilitate exchange of technical expertise and cooperation, she added.
She also highlighted that the business community in Malaysia can now benefit from the preferential tariffs accorded under the various FTAs which are being implemented.