66 TOWARDS THE FUTURE OF SUSTAINABLE EXPORTS A Free Trade Agreement (FTA) is a trade agreement between two or more countries, providing member countries priority access to the respective markets. Each partner country provides exemptions, incentives, and amenities to facilitate trade, investment, and create opportunities for collaboration in economic areas. The FTAs signed by Malaysia are some of the best mechanisms for accessing global markets. They have allowed Malaysian exporters and service providers to gain priority access to markets, while enhancing competitiveness and reducing costs through the reduction or elimination of tariffs and non-tariff barriers and loosening of trade regulations. To date, Malaysia is a signatory to 16 FTAs that are currently in force. Seven of the FTAs are bilateral agreements with Australia, Chile, India, Japan, New Zealand, Pakistan and Türkiye. Malaysia has also signed nine regional FTAs. Seven are through ASEAN and Australia, Hong Kong SAR, Japan, India, New Zealand and the Republic of Korea (ROK), while the remaining two are the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), both of which have been in effect since 2022. RCEP stands out as the world’s largest FTA, involving 2.2 billion people with a total global Gross Domestic Product (GDP) of 30 per cent. With RCEP, it will benefit and potentially enhance global economic growth, in addition to strengthening regional economic integration. RCEP nations include the ASEAN nations and five trade partners, namely Australia, Japan, New Zealand and the Republic of Korea (ROK). The CPTPP was signed by 10 nations in 2018 and has been ratified by Australia, Chile, Canada, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore and Vietnam. As of the time of this report, Brunei has not ratified the agreement. To optimise the advantages provides by FTAs, MATRADE has partnered with MITI to provide Malaysian exporters with up-todate information on the agreements. In 2022, trade with FTA partners contributed 67.3% of total trade (RM1.916 trillion), and 68.9% of total exports (RM1.069 trillion). FREE TRADE AGREEMENT (FTA) 7 BILATERAL FTAs Country Effective Year Malaysia & Japan Malaysia-Japan Economic Partnership Agreement (MJEPA)t 2006 Malaysia & Pakistan Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA) 2008 Malaysia & New Zealand Malaysia-New Zealand Free Trade Agreement (MNZFTA) 2010 Malaysia & India Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) 2011 Malaysia & Chile Malaysia-Chile Free Trade Agreement (MCFTA) 2012 Malaysia & Australia Malaysia-Australia Free Trade Agreement (MAFTA) 2013 Malaysia & Türkiye Malaysia-Türkiye Free Trade Agreement (MTFTA) 2015
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