New opportunities for Malaysia and Australia resulting from MAFTA John Fisher First Assistant Secretary, Free Trade Agreement Division Department of Foreign Affairs and Trade MABC High Tea Briefing Kuala Lumpur, 17 June 2013

Overview Bilateral trade and investment relationship Malaysia-Australia FTA (MAFTA) key outcomes for Malaysia and Australia in goods and services additional benefits next steps

Trade with Malaysia (2012) Australia’s 9th largest trading partner two-way trade worth A$17.7 billion annually Goods $9.6b Services $1.3b Imports from Malaysia $10.9b Goods $5.1b Services $1.7b Exports to Malaysia $6.8b

Trade with Malaysia: Top 5 Crude petroleum Refined petroleum Transport services AV/TV equipment Computers Top 5 imports from Malaysia Crude petroleum Education-related travel Copper Recreational travel Nickel Top 5 exports to Malaysia

Malaysia-Australia FTA (MAFTA) Entered into force on 1 January 2013 “AANZFTA-Plus” Key features tariffs and quotas eliminated or reduced increased market access, including options for majority ownership in selected services sectors Australian Minister for Trade and Competitiveness, Craig Emerson, and Malaysia’s Minister for Trade and Industry, Mustapa Mohamed

MAFTA: Key outcomes – Goods Key benefit for Malaysia: 100 per cent tariff elimination from 1 Jan 2013 Key benefits for Australia: automotives and automotive parts iron and steel processed foods, plastics, chemicals and a range of manufactured products milk, wine and rice Business-friendly rules of origin provisions 6

Case study: Milk industry Harvey Fresh Milk produces fresh juice, dairy and wine products local and foreign markets exports one million litres of fresh milk to Malaysia F&N Dairies Sdn. Bhd major manufacturer and marketer of milk and juice in Malaysia imports 100 per cent Australian fresh milk Under MAFTA: Malaysia will increase the volume of its tariff-free quota of liquid milk from Australia each year additional capacity to AANZFTA commitments

Case study: BlueScope Steel Malaysia Leading supplier of premium metallic coated and painted steel building products entered Malaysia in 1996 seven manufacturing plants in Malaysia, Singapore and Brunei Supplier for key projects: Legoland, KL International Airport 2 Integrated Complex, Pinewood Malaysia Studios Under MAFTA: tariffs on 96.4 percent of iron and steel imported from Australia will be eliminated by 2016 (100 per cent by 2020)

MAFTA: Key outcomes – Services Key benefits for Malaysia ‘AANZFTA Plus’ commitments in: private hospitals, integrated engineering, research and development, technical testing and analysis and pre-erection work at construction sites Key benefits for Australia majority ownership commitments in: higher education, direct insurance and investment banking, telecommunications, selected professional services

MAFTA: Services commitments Source: ‘Services Commitments in Preferential Trade Agreements: An Expanded Dataset’, Roy, 2011 (WTO Staff Working Paper ERSD-2011-18)

Case study: University sector Monash, Swinburne and Curtin Universities campuses in Malaysia Under MAFTA: Australian higher education providers can own up to 70 per cent equity in local campuses increase to 100 per cent by 2015 Malaysia raised the quota of Australian lecturers per institution 20 to 30 per cent

MAFTA: Additional Benefits Investment stronger legal protections increased foreign investment review screening threshold for Malaysian investors in services Business-friendly outcomes mutual recognition of qualifications and licensing for professionals stronger protection of trademarks and copyright facilitation of electronic commerce Economic cooperation 12

Case study: Automotive industry Malaysia Automotive Institute (MAI) and Australia's Cooperative Research Centre for Advanced Automotive Technology (Auto CRC) AutoCRC Vehicle Electrification program: collaboration between University of Wollongong, University of Technology Sydney and CSIRO and MAI Under MAFTA: established an Automotive Industry Dialogue to provide a forum for enhanced cooperation between Malaysian and Australian automotive industries

MAFTA: Next steps In-built agenda framework for ongoing review and expansion of commitments negotiations on binding investment commitments Complements existing and proposed regional agreements ASEAN-Australia-New Zealand FTA Regional Comprehensive Economic Partnership Trans-Pacific Partnership 14

Conclusion MAFTA offers substantial opportunities for business encourage you to take advantage! Further information: www.dfat.gov.au/fta www.austrade.gov.au 15