Australia and Malaysia today signed a comprehensive free trade agreement (FTA) that will open avenues for Australian goods and services into the Malaysian market.
The agreement will further integrate the Australian economy with the fast-growing Asian region, benefiting Australian exporters, importers and consumers.
It was signed in Kuala Lumpur by Australia's Trade and Competiveness Minister Craig Emerson and his Malaysian counterpart Mustapa Mohamed.
Today's signing follows an undertaking in March last year by Prime Minister Julia Gillard and Najib Tun Razak, the Malaysian Prime Minister, to complete negotiations within a year.
Under the accord, Australia will be as well-positioned in the Malaysian market as Malaysia's closest trading partners in ASEAN, and in some cases better.
For Malaysia, the accord allows the same tariff-free entry to Australia currently enjoyed by Singapore.
The FTA will guarantee tariff-free entry for 97.6 per cent of current goods exports from Australia once it enters into force. This will rise to 99 per cent by 2017.
Malaysian exporters, meanwhile, will enjoy duty-free entry to the Australian market.
Australia has also agreed to provide a three-year package of up to 21 short and long-term scholarships, fellowships, awards and exchanges to support Malaysia's economic reform efforts.
This complements existing exchanges between Australia and Malaysia on public sector and economic governance, including through the Endeavour Scholarships.
Malaysia is Australia's 10th largest trading partner, with two-way trade worth almost $16 billion in the 2010-11 financial year.
Australian exporters of automotive parts, iron, steel and dairy products will benefit from improved market access under the agreement.
The FTA will also help diversify the trading relationship by opening Malaysia's services sector to Australian companies.
Malaysia has committed to allowing majority Australian ownership of service providers in a range of industries, including telecommunications, insurance, education, tourism, research and development, accountancy and mining-related services.
The signing of this FTA is an early outcome of the white paper on Australia in the Asian Century.
The agreement goes well beyond the lowering or elimination of import tariffs.
It is a vote of confidence in the Malaysian people, in their economic reform process and in the importance of the Asian region to Australia.
The FTA will also complement benefits already flowing from the ASEAN-Australia-New Zealand FTA.
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