Market accessAPECExport controlsNZ and the WTOOECDTrade AgreementsTrade RelationshipsTrade and economic analysisTrade lawTrade scholarships
Find MFAT's information paper on a country or territory. (We don't have information papers on all countries.)
Although we have tried to use plain English content on the site, you may come across specialist terms and acronyms. Find out what they mean in our glossary of terms.
If you come across a term that isn't included in the Glossary please send us an email.
Securing preferential access to the Malaysian market has the potential to deliver significant gains to our exporters. Malaysia is our 10th largest trading partner taking $523 million of goods and close to $100 million of services in for the year ending December 2004. Removal of tariffs on our current exports to Malaysia would provide modest but worthwhile benefits. Analysis undertaken as part of the Study on the Benefits of an FTA Between New Zealand and Malaysia suggests too that removal of high tariff barriers in other areas, particularly in manufacturing such as wood products, whiteware, mechanical and electrical machinery, aluminium and food and beverages would offer new opportunities to exporters. An FTA would also ensure that New Zealand’s access conditions in the Malaysian market are not undermined by FTAs that Malaysia (and ASEAN) is negotiating with others.
The FTA Study also indicated that addressing non-tariff measures which impact on trade with Malaysia could provide as many benefits as elimination of tariffs. Removal of non-tariff barriers would reduce the costs of doing business with Malaysia.
An FTA would also provide enhanced conditions for the flow of New Zealand services and investment into Malaysia.
We already have FTAs with three other ASEAN countries: Singapore, Thailand and now Brunei (as part of the recently concluded Trans-Pacific Strategic Economic Partnership Agreement). Malaysia is our largest trading partner in ASEAN and has one of ASEAN’s most open economies. Concluding an ambitious, high quality FTA with Malaysia can serve as a model for the ASEAN negotiations and demonstrate further the kind of FTA that is possible between a developed economy and developing economy in the region. Malaysia is also looking at FTAs with other countries including Australia. We want to ensure New Zealand maintains its competitive advantage in the Malaysian market.
Leaders already agreed, when launching negotiations last November, that the ASEAN/Australia/New Zealand FTA would not detract from the provisions of existing bilateral FTAs. This would not rule out a better outcome in some areas where new provisions of the AANZFTA would supersede those that we were able to achieve in our previous bilateral negotiations.
We haven’t done a quantitative analysis, because the modest size of the current economic relationship would probably not produce modelling results that would be very meaningful. But following tariff elimination, New Zealand consumers would benefit from a reduction in import prices and a greater variety of available goods and services. Reducing the costs of doing business by removing non-tariff barriers and increasing access to the Malaysian services market would also produce significant gains. While New Zealand is already a very open economy we’d also expect dynamic gains due to increased productivity and economic growth.
85% of New Zealand’s exports by value enter Malaysia duty free, although tariff escalation is an issue. Certain areas of high tariffs may be affecting New Zealand exporters:
Regulatory and other non-tariff measures also exist in some sectors and, by addressing these through an FTA, it is likely that the transaction costs of doing business in Malaysia would be reduced. This would make New Zealand goods and services more competitive.
On the services side, further liberalisation of Malaysia’s markets could bring benefits to New Zealand. For example restrictions on establishing wholly owned foreign enterprises creates barriers for our education providers wanting to set up institutions in Malaysia. We also see opportunities in the professional services sector, in engineering, construction, computer and other business related services. Further liberalisation in the services area would also increase investment opportunities in Malaysia.
Malaysia and New Zealand are aiming to complete the negotiations as quickly as possible with the objective of achieving a high quality and comprehensive agreement covering all goods, services and investment.
