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Malaysia, Japan one step closer to FTA

IHT/Asahi: December 25, 2004

Malaysia, Japan one step closer to FTA

The Asahi Shimbun

Japan and Malaysia on Friday took a step closer to reaching a free trade agreement, clearing a key hurdle related to the agricultural, forestry and fisheries sector, government sources said.

FTA talks are likely to wrap up next year, following a decision on the other outstanding issue-Malaysian tariffs on imported vehicles.

According to Friday’s agreement, Japan will abolish tariffs on forestry products-except those on plywood, which makes up 5.5 percent of Malaysia’s total exports to Japan-and remove tariffs on tropical fruit, vegetables and shrimp.

Japan will also create a tariff-free import quota for 1,000 tons of bananas and reduce tariffs on margarine from 29.8 percent to 25 percent over five years.

The countries will renegotiate tariffs on products sensitive to Japan, such as plywood, pineapples and dairy products, or exclude them from the FTA agenda.

Japan has been opposed to Malaysia’s demand to abolish tariffs on the products.

Malaysia, meanwhile, agreed to release a statement promising to address the issue of plywood processed from illegally felled timber in Indonesia.

Japan has been pressing Malaysia to ban exports of such plywood.

The next hurdle to overcome is a disagreement over Malaysia’s tariffs on imported vehicles.

Japan has called on Malaysia to abolish or reduce the high tariffs it imposes on imported vehicles to protect the domestic auto industry.

If a deal is clinched, Malaysia would become the third Asian nation to establish an FTA with Japan following Singapore and the Philippines.

 source: Asahi Shimbun