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Trade deal with Malaysia fills vital gaps for agriculture

22 May 2012

The National Farmers’ Federation (NFF) has welcomed today’s signing of Australia’s Free Trade Agreement (FTA) with Malaysia, noting that it will fill a number of gaps within the ASEAN-Australia-New Zealand FTA (AANZFTA) and improve international market access for Australian agricultural goods.

“After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” National Farmers’ Federation Vice President Duncan Fraser said.

“Protectionist sentiment around agricultural goods is rife and growing across the globe, so in this context it is pleasing that Australia has managed to forge an agreement with Malaysia that has dealt with some sensitive agricultural issues that were not effectively covered by AANZFTA.

“While under the AANZFTA agreement, most of Australian agriculture’s key interests had tariffs bound at zero, dairy and rice are two sectors where incremental market access improvements have been negotiated under the Malaysian FTA.

“This trade deal was also particularly important for sectors such as dairy that have been facing a competitive disadvantage in Malaysia compared with New Zealand who have already had a completed FTA with Malaysia in place.

“The FTA also signals some administrative benefits for Australian agricultural exporters through streamlining of Rules of Origin declaration processes and improved marketing arrangements for certain commodities.

“The Malaysian market is worth around $1 billion in Australia agricultural exports – including being our fourth largest sugar export market and our fifth largest wheat export market.

With economic growth at around 5 per cent per annum, Malaysia forms an important part of the Asian Century story and the opportunity that this presents for Australian agricultural producers. Demand for Australia’s top quality food and fibre will only continue to escalate in the medium to long term in countries like Malaysia and Australian farmers are ideally positioned to capitalise on the increased demand that will ensue.

“Despite the completion of this agreement, there is still a lot more to be done in order for Australia’s farmers to tap into the full potential across the Asian region and beyond. The NFF will now throw its attention towards ensuring that agriculture remains front and centre in completed FTA’s with South Korea, Japan, China and Indonesia as immediate priorities.

These are all markets with enormous growth opportunities and where significant barriers to trade in agriculture still exist, not only through tariffs that restrict trade but also through technical or so called ‘behind the border’ restrictions.

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