Malaysia: Private sector told to engage in FTA process
January 27, 2005
Private Sector Told To Engage In FTA Process
KUALA LUMPUR, Jan 27 (Bernama) — Datuk Seri Rafidah Aziz has called on the private sector to give their input and help the government in formulating free trade agreements (FTAs).
Such pacts would create more opportunities for businesses while ensuring that the country’s vital interests are protected and promoted, she said.
The Minister of International Trade and Industry said the business community should actively engage in the FTA process by providing feedback and informing the ministry of problems they encounter with their trade partners.
"This will enable the government to adopt the appropriate strategy in pursuing FTAs," she said during a seminar cum dialogue on Malaysia and FTAs, here Thursday. The event was attended by about 800 private and public sector officials.
The FTAs pursued by Malaysia include those being negotiated with countries individually and on a regional platform via Asean, she said.
For instance, Rafidah said although countries would continue to reduce their tariffs, exporters might face newer non-tariff measures (NTMs) under the guise of protecting the environment and ensuring health standards as well as maintaining national security.
"Malaysian exporters should provide feedback to the government on barriers that they encounter in foreign markets," she said.
The minister said that Malaysia was committed to undertaking and finalising negotiations to clinch FTAs within the agreed timeframes.
"Malaysia cannot remain complacent in the face of challenges brought about by globalisation and increased competition," she said.
"The private sector must work with the government as this is a national effort aimed at ensuring Malaysia will remain competitive in world trade," she said.
Rafidah said Malaysia was currently negotiating with Japan, India, New Zealand and Australia leading to the evolution of FTAs as well as having a Trade and Investment Framework (Tifa) with the United States which she hopes would be a precursor to an FTA.
Asean meanwhile was in talks to forge FTAs with China, India, Japan, Korea, Australia and New Zealand,
With Japan, the negotiation is expected to be completed by mid 2005 on an Economic Partnership Agreement (EPA) which incorporates an FTA in goods, services and investment.
"As for India, the process will begin with the establishment of a joint study group to identify the economic benefits for both parties. It will propose a framework for enhancing trade in goods and services, including the feasibility of an FTA.
She added Malaysia completed feasibility studies on possible bilateral FTAs with Australia and New Zealand respectively.
FTAs would help Malaysia retain and strengthen its existing export markets, particularly where Malaysia was already the market leader with some of its trading partners.
However, Rafidah said Malaysia would face several challenges in negotiating these agreements.
For instance, while Malaysia’s applied tariff rates are generally low, there are a number of strategic goods and sectors with high tariffs that negotiating partners want to address.
In this respect, she said Malaysia would have to consider a satisfactory outcome that will take into account the interest of both parties.
She also said that the services sector was of major interest to the negotiating partners, but she lamented it had not responded positively to the call by the government to increase its level of competitiveness and remains apprehensive to undertake its commitment to liberalise.
"I call upon the Malaysian service providers to look beyond the limited domestic market and undertake liberalisation commitments that will lead to an increase in foreign direct investments (FDIs), technology transfer and increase their market opportunities," she said.
Rafidah said current and future negotiations would see other issues being raised, such as competition policy and government procurement.
This would mean having to consider taking on commitments that Malaysia has so far resisted in the World Trade Organization (WTO) context, she said.
"There is a need to maintain a balanced approach and outcome to the negotiations. The government will need to look at the overall benefits to the country and not just on the benefits to certain sectors only," she said.
