August 2011 update on the Australia-Malaysia Free Trade Agreement negotiations

Good progress was made during the 9th round of Malaysia-Australia Free Trade Agreement (MAFTA) negotiations, held from 4 to 7 July 2011 in Kuala Lumpur. Rules of Origin (ROO) were not discussed in this round as both parties had previously agreed to schedule ROO negotiations from 1 to 4 August 2011.

The round was held against the background of the agreement reached between Prime Minister Gillard and Malaysia's Prime Minister Najib to conclude the MAFTA negotiations by March 2012. Good progress was made in resolving outstanding issues in the legal text and the remaining issues are now relatively small in number. However, gaps remain on market access including in respect of some of our key interests, for example, automotive vehicles and automotive parts, wine, financial services and telecommunications.

In market access discussions on goods, progress was made in achieving an ASEAN-Australia-New Zealand FTA (AANZFTA) plus outcome from Malaysia. However, Malaysia has not yet addressed some of Australia's key market access requests. Malaysia recognised that Australia has made a high quality offer on tariff elimination and that this offer is conditional on a sufficiently ambitious Malaysian response. On services we sought improvements to Malaysia's February 2011 offer.

Negotiations on electronic commerce and competition policy made good overall progress. Further work is required on intellectual property and economic and technical cooperation provisions. Both countries are exploring possible labour and environment provisions.

Government procurement remains an area Malaysia is not willing to engage on. Australia explained that we view government procurement commitments as a key AANZFTA-plus outcome.

The 10th round of negotiations is tentatively scheduled to be held in Australia in the week commencing 24 October 2011.