Malaysia NZ Free Trade Agreement

New Zealand and Malaysia have signed a new Free Trade Agreement which started on 1st August 2010.

They have taken a First Mover Advantage and Australia is now lagging significantly behind. Regardless of AANZFTA, which includes Malaysia, New Zealand has now a distinct advantage due to the time frames on import duty reductions and increased quotas (milk) and other specific product concessions, which now disadvantage Australian exporters.

The AANZFTA already provides New Zealand and Australian goods traders with some of the best commercial access possible to the Malaysian market. The MNZFTA provides a range of enhancements which are available to New Zealand only. This will give New Zealand exporters a competitive advantage over international competitors that do not enjoy similar preferential access in the Malaysian market.

Key outcomes for major goods exports to Malaysia

Kiwifruit

Despite Malaysia’s current applied 15% tariff on kiwifruit imports, over the past three years, New Zealand exports of kiwifruit to Malaysia have grown by 123%. Under the AANZFTA agreement kiwifruit exports to Malaysia will be duty-free by 2012. The Malaysian FTA improves on this already useful outcome by providing for duty-free access for New Zealand kiwifruit upon entry into force of the Agreement.

Meat, Wool, Dairy, Fish and Forestry products

The MNZFTA ‘binds in’ the existing duty-free access for New Zealand dairy (except liquid milk) meat, wool, fish and forestry product exports. In practice, this means Malaysia cannot reapply tariffs on New Zealand agricultural exports giving New Zealand exporters added certainty that many of their competitors do not enjoy.

Liquid Milk

New Zealand has secured commercially significant improvements on liquid milk tariff rate quota access upon entry-into-force. These improvements include the elimination of the in-quota duties and an increase in the in-quota volumes to a sum of 2.1 million litres growing by up to five percent per annum. This represents an improvement on the AANZFTA outcome which provided for the elimination of the in-quota 20% tariff by 2013 (three years later than the MNZFTA outcome) and in-quota liquid milk access to a total sum of 550,000 litres growing by one percent per annum.

Manufactured Goods

The MNZFTA improves on the AANZFTA outcome for a number of manufactured product exports. Examples of manufactured products subject to earlier elimination include:

• a number of steel lines (in which New Zealand exports and currently face a 50% tariff) are eliminated by 2016 at the latest (reduced to 10% in 2020 in AANZFTA)
• various paints and varnishes lines (currently facing a 25% tariff) are eliminated in 2016 (not until 2020 in the AANZFTA)
• a number of plastic product lines (currently facing tariffs as high as 30%) are eliminated in 2012 (as opposed to 2020 in the AANZFTA).

Now is the time to get in front of your local MP and ask how long is going to be before we get an FTA with Malaysia and have access to the same beneficial treatment that New Zealand has negotiated?