Malaysia External Trade Development Corporation

Japan-Malaysia Economic Partnership Agreement

Background

• Preparatory work to establish a Japan-Malaysia Economic Partnership Agreement (JMEPA) commenced in February 2003 and involved government officials, representatives of trade and industry and academicians in a Joint Study Group.
• The Prime Ministers of Malaysia and Japan agreed on 11 December 2003, to commence formal negotiations. Negotiations were held in Kuala Lumpur and Tokyo in 2004 and 2005.
• Agreement in principle was reached on 25 May 2005 between the Prime Minister of Malaysia and the Prime Minister of Japan on the key elements of the JMEPA.

Scope

• The JMEPA consists of an FTA component and bilateral economic cooperation. The implementation of tariff concessions would be over 10 years with flexibility for selected sensitive products.
• The FTA component covers: trade in industrial and agricultural goods, trade in services, investment, rules of origin, customs procedures, standards and conformance, intellectual property, competition policy, enhancement of business environment, safeguard measures and dispute settlement.
• Cooperation areas included are: agriculture, forestry and commodities, education, human resource development, information and communication technology (ICT), small and medium enterprises, science and technology, tourism and environment.

Status

• Negotiations were concluded in October 2005.
• The Agreement was signed by both Prime Ministers on 13 December 2005 in Kuala Lumpur and came into force on 13 July 2006.
• Sub-Comittees on Imprement of Business Environment and Rules of Origin met on 19 March 2007 and 10 May 2007 respectively to discuss issues arising from the implementation of JMEPA.

Benefits

• The JMEPA would allow Malaysia to maintain if not expand its share of the Japanese market for Malaysian exports through preferential tariff treatment and technical collaboration to meet requirements on standards and technical regulations.
• Malaysia would also be able to enhance its position as an attractive destination for Foreign Direct Investment (FDI), particularly in relation to competition from other investment seeking countries in the region.
• The cooperation and collaboration activities envisaged under the JMEPA would promote the growth of new sectors such as high-tech industries, including biotechnology, services including manufacturing related services and ICT and multimedia.
• For SMEs, economic and technical cooperation would facilitate quality enhancement, vendor development and inclusion of Malaysian SMEs into the manufacturing supply chain of Japanese multinational companies.
• Malaysia's total trade with Japan has increased significantly from RM60.0 billion in 1994 to RM112.9 billion in 2005. Japan accounts for 11.7 per cent of Malaysia's global trade in 2005 and second largest trading partner after ASEAN. Japan, with a GDP per capita of RM106,400 continues to be an important market for ASEAN and Malaysia.

 

Malaysia-Pakistan Closer Economic Partnership Agreement 

Background

• Y.B. Dato' Seri Rafidah Aziz, Minister of International Trade and Industry Malaysia and HE Tahir Mahmood Qazi, High Commissioner of Pakistan to Malaysia, signed the Malaysia-Pakistan Closer Economic Partnership Agreement (MPCEPA) on 8 November 2007.

Scope

• The MPCEPA encompasses liberalisation in trade in goods and services, investment, as well as bilateral technical cooperation and capacity building in areas such as sanitary and phytosanitary measures, intellectual property protection, construction, tourism, healthcare and telecommunications.

Status

• This Agreement came into force on 1 January 2008.
• The existing Bilateral Trade Agreement, Investment Guarantee Agreement and the Early Harvest Programme will be effectively replaced by the coming into force of this more comprehensive and substantive Agreement. However, both countries agreed to review the MPCEPA every 5 years.
• Malaysia and Pakistan will enter into another round of negotiations in 2009. This is to view:

Benefits

• The Agreement will further facilitate and strengthen the two-way trade and investment as well as enhance bilateral economic and industrial cooperation on a long term basis between Malaysia and Pakistan .
• The MPCEPA will also facilitate trade through closer collaboration and greater information exchange.
• The Agreement provides an excellent opportunity to the business community of both countries to further expand their bilateral trade and investment linkages.
• The Agreement will enable the Malaysian business community to use Pakistan as the springboard to also expand their business with Pakistan 's trading partners in the South Asia region.
• Pakistan 's business community can also leverage on Malaysia 's strong business links with ASEAN and the Far East to expand their economic interest in the region.