November 2005 update on the Australia-Malaysia Free Trade Agreement negotiations

Negotiating meetings on goods and dispute settlement

Australia and Malaysia held meetings on goods and dispute settlement issues in the week of 14 November 2005, after agreeing to postpone the third round of FTA negotiations. The postponement was necessitated by Malaysia's WTO and other FTA commitments (Malaysia is involved in four bilateral and five regional FTA negotiations) which limited its ability to adequately prepare for a full bilateral round with Australia. Both sides agree on the importance of ensuring sufficient preparation for negotiating meetings.

Good progress was made at the meetings on goods and dispute settlement, which were held in Canberra. A strong team from Malaysia provided us an excellent opportunity to increase our understanding of their position on tariff elimination, customs procedures, sanitary and phytosanitary measures and technical barriers to trade issues. There is a substantial program of follow-up work.

Australia underscored its commitment to a comprehensive, high-quality agreement which provided significant benefits to both parties. There was constructive dialogue on possible elements to be covered in the various chapters of the goods part of the FTA. There was agreement we should soon be able to start considering draft text of some chapters. There was also discussion of possible approaches to reducing and eliminating tariffs under the FTA. Work on rules of origin (ROO) is proceeding well.

Officials engaged in discussions on the basic elements of a dispute settlement mechanism. We continue to narrow the gap between our two positions. Both parties share an interest in a mechanism which provides for the timely and effective resolution of disputes through consultations wherever possible, with adjudication as a last resort. Officials are considering suitable dates for an inter-sessional meeting to further advance this issue.

We are also seeking opportunities to advance work in other areas of the negotiation. A third full round of negotiations will take place in early 2006.