ABC News Radio

Subjects: Malaysia-Australia Free Trade Agreement.

Transcript, E&OE

22 May 2012

TRACEE HUTCHISON: But firstly to Kuala Lumpur now. And after seven years of negotiation, Australia and Malaysia have finally signed an historic free trade agreement. Australia's Trade Minister Craig Emerson and his counterpart Mustapa Mohamed signed the deal in Kuala Lumpur earlier today. The deal will guarantee tariff free entry to 99 per cent of Australian goods exported to Malaysia, and allow Australian firms to own up to 70 per cent of the Malaysian based company. Well, for more on what the deal means for both countries we're joined by the Federal Minister Craig Emerson on the line from Kuala Lumpur. Minister, can you start by outlining what the benefits of this deal will be for Australian and Malaysian businesses.

CRAIG EMERSON: Sure I can Tracee. The deal means that goods from Australia will be able to enter into Malaysia largely without any duty on them. In fact, more than 97 per cent of the value of our goods exported in recent years will enter duty-free from the date of entry into force, which is the 1st of January next year. And that will go up to 99 per cent by 2017. And for Australia we will provide tariff-free entry from entry into force, that is from 1st January next year. More than that, though, this is an agreement that extends into services, allowing Australian accounting and financial services and other professional service businesses to set up in Malaysia with up to 70 per cent, and in some cases up to 100 per cent, Australian ownership. And that's really important, given the value of services in international trade is rising all the time.

HUTCHISON: So it brings our two economies very much closer together. It is, I imagine, part of the Australian Government's vision for positioning the country within the so-called Asian Century, economically and strategically. The deal, though, has been seven years in the making. What's been the delay?

EMERSON: There was in fact a real hiatus in the negotiations until Prime Ministers Najib and Gillard got together in Malaysia and then again in Australia in March 2011. They both came to me and said that they would like to see this deal completed within a year. We were able to do that; we did so on the 30th of March this year. So, we'd finished the negotiations and signed the actual agreement – because you've got to do all the legal work and get it through both governments – today. So that was terrific. When I told Prime Minister Gillard that we had successfully completed the negotiations she said two words: "that's fantastic".

HUTCHISON: Well Minister, the deal comes on the same day as Malaysian Opposition Leader Anwar Ibrahim has appeared in court facing more charges that many speculate are designed to damage his political chances. Are there concerns, do you believe, about dealing with a government that still locks up its political opponents?

EMERSON: Well, of course, it's not for me to comment on these matters as the Trade Minister – we've been concentrating on integrating our two economies, which obviously has more than dollars and cents attached to it. It means that young people in particular can look forward to more diverse and rewarding career opportunities, and I think that's something that governments should be looking to achieve. So that's what I've been concentrating on, Tracee, and we've been able to achieve this historic result.

HUTCHISON: It does sort of smack of trying to quarantine particular aspects of the Malaysian Government's approach to its issues. Just nine months ago your Government was trying to cement a different kind of trade agreement with Malaysia – the Malaysia solution – and quarantined it's less than … less-than-flattering human rights record. Is this in any way an attempt to ameliorate the embarrassment caused by the failure of the Malaysian solution?

EMERSON: This has got nothing to do with the Malaysian arrangements, and I'm surprised that you would conjure up in your mind any thought that completing a trade deal which

HUTCHISON: Well, it's not in my mind. I mean, it's one of the most ….

EMERSON: … has been going since 2005, has been accelerated as a result – as I've just indicated – of a meeting between Prime Ministers Najib and Gillard in March of 2011. And that objective was to have that completed in March of 2012 – which we did. I don't think that people back in 2005 envisaged that there would be an issue of getting or assembling an agreement with Malaysia on people smuggling. And I think, therefore, it stands the common sense test that they are unrelated.

HUTCHISON: Just finally, then, Minister Emerson: you're heading now to China, Japan and South Korea – all countries Australia is negotiating free trade agreements with. Does signing this deal with Malaysia shore up your position with those countries?

EMERSON: What it indicates, Tracee, as you mentioned in your introduction, is that the Australian Government is very sincere about economic integration in the Asian Century. We are ensuring that Australia is in the right place at the right time, in the Asian region in the Asian Century. And we certainly are seeking to bolt on to this most dynamic region on earth. Visionary Labor leaders going back to Whitlam, Hawke and Keating had this in mind; we're bring it home with deals such as the Malaysia-Australia free trade agreement.

HUTCHISON: Minister Emerson, we're grateful for your time, sir, on the line from Kuala Lumpur.

EMERSON: Thanks a lot Tracee. Bye bye now.

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