Last night (Malaysian time), Hon Tim Groser, our Trade Minister, and his Malaysian counterpart, Y.B. Dato’ Mustapa Mohamed, signed the NZ-Malaysia Free Trade Agreement. PMs John Key and Y.A.B. Dato’ Sri Mohd Najib Tun Abdul Razak were in attendance.
This essentially is the culmination of bilateral talks which were kicked off by Helen Clark in 2005, which is why Labour developed, and the Nats are continuing, the bilateral approach to trade – they often take longer to nail down than one (or more) electoral cycle(s). As you can see by various news stories logged by the journos present, Fran O’Sullivan for the Herald, Colin Espiner for the Press and Ian Llewellyn for NZPA and from Radio NZ today, it is like the ASEAN Free Trade Agreement except better and faster.
95.1% of tariffs will be eliminated immediately the FTA comes into force in 2010, and then it moves quite rapidly, in trade terms, to 99.5% tariff elimination by 2016. That’s in 7 years, quite a lot faster than the 12 years it will take to get to the same point under the AANZFTA (ASEAN one). This is good news for our exporters, especially kiwifruit growers who will see a 15% tariff disappear immediately upon implementation. That’s a lot more profit to be kept in NZ. Good on them. It’s also a fillup to Fonterra which has invested megabucks in new plant in Malaysia recently.
In case you were wondering, the remaining .5% tariffs apply to things like wine and pork products which have their own religious and cultural barriers here. Fair enough.
The labour and environment side clauses are there too. It’s going to be important however to ensure that they are honoured at every point. Our CTU will watch with care to make sure that the clauses signed off by Kate Wilkinson a few weeks ago in NZ mean what they say. We were told yesterday by one of the presenters at a very good seminar organised by NZTE that Malaysian employment law tends to be “employee friendly”. That may be news to some of the unions here.
There was a formal dinner last night attended by both the PMs. I had the pleasure of sitting next to Dato’ Dr Michael Yeoh, CEO of the Asian Strategic Leadership Institute – and also a Commissioner on the Malaysian Human Rights Commission. Now THAT was an interesting conversation………for another blog.
Great news for export
the remaining .5% tariffs apply to things like wine and pork products which have their own religious and cultural barriers here. Fair enough.
Doubt anyone cares, but if the barriers are religious and cultural why have an economic barrier at ALL? Why not let people not that way inclined get wine and pork at a fair price! Bah!
With the loss of the Bridgestone factory in Christchurch, we can see less jobs which have a high value output( and hence ‘productivity’) and get in return the chance to export ‘low value’ items like kiwifruit.
No wonder the productivity is very low when both political parties are happy to see full time jobs go in return seasonal low wage jobs ( in which we import workers) are done in return.
Free Trade !! but not fair trade
With all due respect and sympathies to the Bridgestone workers (in both Christchurch and Adelaide), it looks like the writing had been on the wall for some time and the chronology of our recent FTAs would have had no bearing on it.
Bridgestone’s media statement (at http://www.bridgestone.co.nz/corporate/news_article/bridgestone_australia_ltd_announces_restructure ) indicates they have been trying to save the factory for a while.
I would have thought NZ does not have a comparative economic advantage in tyre manufacturing anyway.
I think the major winners in the Malaysia FTA may well be the export education services, some of our education and training providers who are trying to encourage Malaysian students to study here, rather than at competing english-language institutions in Australia, the US and UK.
That is, if Anne Tolley hasn’t wrecked them first.
Red Rata , you dont cut of your nose to spite your face and then call it a triumph of plastic surgery.
Comparative advantage ? Writing on the wall ?
Funny out driving out a longstanding business isnt called that anymore.
Look at Fisher & Paykel. They diversified from whiteware to medical equipment, as the market dictated. And then the market dictated list your medical business as a stand alone company. Then they moved production nearer the market as in Australia, but that wasnt enough the markets said ‘comparative advantage’ and they expanded by buying more brands and moving out of Australia and NZ to mexico. Result business practically bankrupted by the dizzy round of ‘reading the writing on the wall’
Too bad they didnt keep the medical supplies business they wouldnt be so dependent of the ‘whims ‘ of the market
@StephenR – say what?
@ghost – F&P DID keep the medical supplies business. I was talking to CEO Mike Daniell just the other week in Auckland when they were nominated for a BusNZ Export Award. They are going from strength to strength.
@red rata – good link. Ta.
I understand F& P Healthcare is separately listed with separate management, so couldnt be a part of the whiteware business.
Maryan, it’s certainly great to see the Labour spokesperson for trade come along on the trade delegation. Businesspeople appreciate a bilateral approach to free trade, with both National and Labour working together to make it easier for businesses to trade.
At Changi Airport now about to head back to Auckland. A great trip overall and the Kiwis I spoke to were most certainly glad to have gone to KL, and can see great opportunities in Malaysia.
Is this another dumb trade agreement like the example Winston peters is exposing where we send a whole fish to china where they fillet it and package it and sell it back to nz.How stupid are we.
Malaysians who want their children educated here got their NZ PR years ago so get education here for free…Generally, Malaysians prefer Australia anyway.
Is anyone saying anything about the current persecution of Malaysian Christians? Nine churches have been attacked. Malaysia is likely to descend into a hellhole.
The no is now up to eleven.
Also so few comments on China’s 11 billion dollar deal with Malaysia for huge energy plants/ dams etc in Malaysian Borneo. The project will displace acbout 6 hundred thousand indigenous Sarawakians. Who is ever going to care about them??