Published on: Wednesday, January 02, 2013
Kota Kinabalu: Yesterday (Jan 1) marked the start of the Malaysia-Australia Free Trade Agreement (Mafta) allowing our exporters duty-free treatment for their goods entering Australia.
Mafta provides for the granting of duty-free treatment for 100 per cent of Malaysian goods exported to Australia.
Australia and Sabah have a special relationship going back to the days of WWII when Australian forces liberated North Borneo from the Japanese Imperial forces.
It is meaningful for Sabah and any of our local exporters to savour the start of the Mafta which was signed last May 22 to make the most from this opportunity to develop market share in Australia.
Under Mafta, which complements the Asean-Australia-New Zealand Free Trade Agreement, Australian exports to Malaysia would only enjoy reduced tariffs for goods gradually reaching up to 99 per cent by 2020 when Malaysia is scheduled to become a high income country.
Malaysia would progressively liberalise its duties on 10,295 tariff lines by 2020 with Malaysian import duties on most products like paper, textiles and automotive components eliminated.
Malaysian import duties on 357 products like vehicles, iron and steel products and fruits would be progressively reduced and eliminated by 2020.
With this preferential tariff treatment more in favour of Malaysia initially, local producers, manufacturers and exporters would be in a better position to compete in the Australian market especially for goods like iron and steel products, plastic products, apparel and clothing and wood products.
Sabah should excel in exporting the wood products category like garden furniture. However, Sabah faces shipping problems without a viable shipping fleet or direct sea links with Australia spoilt by the restrictive reputation of the Cabotage policy before its partial liberalisation.
To further promote and facilitate trade and investment in the services sector, Australia and Malaysia offered commitments to liberalise selected sectors.
Malaysia offers up to 100 per cent equity holdings allowed for education and private higher education. Sabah should seize this opportunity to invite an Australian university to be set up in Sabah. Sarawak already has two - Curtin and Swinburne in Miri and Kuching respectively with some 50 Sabahan student enrolments per semester year.
Malaysia also offers up to 100 per cent equity holdings allowed for telecommunication.
In the financial sector, Malaysia allows equity holdings of up to 70 per cent in insurance companies and investment banks with a higher number of Australian expatriates with senior managerial and specialist skills allowed for the banking, insurance and capital market sub-sectors to fill up more of our empty condominiums.
Equity holdings of up to 100 per cent in investment advisory companies and up to 70 per cent in both corporate finance advisory and financial planning companies are allowed.
On the Australian side, Malaysian participation in private hospital services and facilitating Malaysia's participation in providing traditional and complementary medicine services are welcome in Australia.
It's time we export some of our bomohs down under and see whether their skills have a positive effect on Australians and Malaysians living down there.