Malaysia may be keen to take part in regional trade pact

Business Times 2010/02/08

Malaysia may be keen to take part in regional trade pact

By Rupa Damodaran

MALAYSIA is keen to participate in the Trans-Pacific Partnership (TPP) regional free trade pact only if certain parameters are met, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said.

"We have indicated during the TPP exploratory talks that our interest depends on the stakeholder discussion. That position is subject to certain parameters which will be defined in the next few weeks," he told a media briefing last week.

Malaysia is not attending the TPP’s first meeting in Australia next month.

The TPP, formerly known as the P4, was initiated by Singapore, Chile, New Zealand and Brunei, and later saw Australia, Peru, Vietnam and the US joining in.

Deputy US trade representative Demetrios Marantis, who met up with Mustapa and senior officials of the Ministry of International Trade and Industry (Miti) last week, said the eight-member TPP was keen to include Malaysia as the US planned to step up economic engagement with the fast-growing markets of the Asia-Pacific.

In the meantime, Malaysia will be pursuing trade talks with Turkey and the Gulf Cooperation Council this year, apart from ongoing trade talks with India, Chile and Australia.

Malaysia has bilateral free trade agreements (FTAs) with Japan, Pakistan and New Zealand, and is a party to regional trade pacts via Asean with China, South Korea, Japan, Australia and New Zealand.

The Asean FTA initiatives with China, India, South Korea, Australia and New Zealand were implemented on January 1 this year. Malaysia’s bilateral FTA with New Zealand also came into force on the same date.

Mustapa said that FTAs had played an important part in boosting trade last year between Malaysia and its partners, excluding Japan.

Exports to Asia last year, which comprised 68.5 per cent of the total, exceeded that to the traditional markets of the European Union and North America.

Malaysian exports totalled RM553.3 billion last year, down from RM663.49 billion in 2008.

Mustapa said that with the Doha Development Round, a trade negotiation round of the World Trade Organisation, still facing difficulties and with little prospect of a conclusion by this year as envisaged, the country would continue to focus on bilateral FTAs.

More Malaysian exporters were utilising the FTA preferential access, he added.

The number of certificate of origin (COO) issued under the preferential schemes of the FTAs has increased as these documents ensure that only products from participating FTA countries enjoy the preferential treatment.

On export growth this year, Mustapa said that one of the strategies was to improve access to the country’s products and services.

"Apart from strengthening existing FTAs, negotiating and concluding FTAs, we will also have to address the implementation issues and improve the rate of utilisation."

Fast-growing markets such as China, India and the Middle East were among the main targets, he said.

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source: Business Times