Malaysia – New Zealand Free Trade Agreement
MNZFTA Provides New & Additional Benefits to Exporters
Oct 27, 2009
The Malaysia-New Zealand Free Trade Agreement (MNZFTA) provides New Zealand investors and exporters of goods and services with new and improved market access opportunities in Malaysia, in addition to greater certainty and transparency. It builds on the platform and commitments made in the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) signed in February 2009.
The free-trade agreement contains measures to improve business flows and promote economic cooperation in a broad range of areas of mutual interest. It is supported by agreements on trade and the environment and trade and labour matters. The objective is to complement the existing economic partnership between New Zealand and Malaysia and to create new trade and investment opportunities in areas of mutual interest.
Trade Relationship Between New Zealand and Malaysia
Malaysia is now New Zealand’s eighth largest export destination making it more important to New Zealand exporters then countries such as India, Germany and Canada. Exports of goods from New Zealand to Malaysia grew by over 80% between 2004 and 2008. This was more than double the rate of growth of exports from New Zealand to the rest of the world.
Exports of services from New Zealand to Malaysia are also growing, particularly in areas like private education, information and computer technology (ICT) and engineering. The number of fee-paying Malaysian students in New Zealand educational institutions increased by over 70% between 2003 and 2008, making Malaysia the third largest source of fee-paying university students in New Zealand and its second largest source of PhD students.
Benefits for New Zealand Under the MNZFTA
The Agreement lists many important benefits, including:
- elimination of more Malaysian tariffs faster than was possible in AANZFTA
- facilitation of bilateral trade through 48-hour customs clearance and self-declaration of origin for New Zealand exports
- improved market access for New Zealand services providers in key areas
- provision of robust investment protection provisions creating a more predictable and transparent investment climate for New Zealand investors and their investments in Malaysia
- inclusion of a robust dispute settlement framework allowing New Zealand to resolve any trade-related disputes that arise
- raising New Zealand businesses’ profile in Malaysia
New Zealand Commitments to Malaysia
New Zealand will eliminate tariffs on all products of Malaysian origin by 2016. This is the same date at which Malaysia eliminates tariffs on New Zealand products. New Zealand already provides duty-free access for 72.1% of imports from Malaysia. Under the free-trade agreement, this will increase to 90.8% in 2010, 94.6% in 2012, 95% in 2014 and 100% by 2016.
While some New Zealand tariffs are eliminated on entry-into-force, longer transition periods of up to seven years have been secured for import sensitive products including margarine, clothing, footwear, carpets, some textiles and some manufactured products such as some steel products, plasterboard and most wooden furniture.
New Zealand has agreed to extend to Malaysian investors any better treatment it agrees in future investment agreements through the reciprocal Most Favoured Nation (MFN) provision.
Overall Benefits of the Malaysia-New Zealand Free Trade Agreement
The important strategic benefits provided the MNZFTA are:
- a broadening and deepening of New Zealand’s bilateral relationship with Malaysia
- building on the AANZFTA platform to further integrate New Zealand’s into the rapidly evolving regional economic architecture
- signalling New Zealand’s commitment to ‘staying open for business’ and a liberal global trading environment at a time when the threat of rising protectionism is a concern.
Source: New Zealand Ministry of Foreign Affairs and Trade
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