WT/REG340/M/1  
 
31 October 2014  
(14-6336)  Page: 1/3  
Committee on Regional Trade Agreements 
Seventy-fourth Session   
 
 FREE TRADE AGREEMENT BETWEEN AUSTRALIA AND MALAYSIA  
GOODS AND SERVICES 
NOTE ON THE MEETING OF 23 SEPTEMBER 2014 
Chairman: Ambassador Francisco Pirez Gordillo (Uruguay) 
1.1.  The 74th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4338 dated 11 August 2014. 
1.2.  Under Agenda Item B.II of the session, the CRTA considered the Free Trade Agreement 
between Australia and Malaysia, (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement ha d entered into force on 1 January 2013. It had 
been notified to the WTO by the Parties on 13 May 2013 under Article XXIV:7(a) of the GATT 1994 
and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG340/N/1) and under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/695). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG340/1 dated 14 April 2014) and written questions and replies (document WT/REG340/2 dated 26 June 2014) had been issued. In addition, a room document containing questions submitted after the deadline had been issued. 
1.4.  He proposed to organize the consideration of the Agreement by first asking the Parties and 
then other Members to give any general comments. Members would then turn to the specifics of the Agreement, using the Factual Presentation to guide the debate and would then go through the 
questions and replies document. 
1.5.  The representative of Australia said he was pleased that the ASEAN-Australia-New Zealand 
(AANZFTA) agreement had been considered before the Agreement with Malaysia. This was 
because Australia viewed the AANZFTA as a significant achievement and a platform for ongoing 
engagement with countries in the region in at least three different ways: supporting ASEAN in its own economic integration efforts because a stro nger ASEAN was good for Australia; AANZFTA 
would enhance Australia's engagement with ASEAN-centred agreements such as the Regional 
Comprehensive Economic Partnership (RCEP) negotiations; and provided a platform for bilateral 
agreements with ASEAN members to realize AANZFTA-plus outcomes by focusing more intensively on particular market access and other priorities  than had been possible under the AANZFTA. There 
was, however, a sequencing issue because Austra lia had concluded bilateral FTAs with Singapore 
and Thailand well before the AANZFTA and those bilateral agreements therefore had a different architecture to the AANZFTA. However the architecture in the Agreement with Malaysia reflected 
that of AANZFTA. 
1.6.  In a joint statement by the parties on th e Agreement, he welcomed consideration by the 
Committee on Regional Trade Agreements of the Malaysia-Australia Free Trade Agreement 
(MAFTA). The parties valued the work of the CRTA to ensure transparency of RTAs and evaluate 
the Agreement's consistency with WTO rules. The Agreement had been notified to the WTO on 
13 May 2013. Ministers from Australia and Malays ia had signed the Agreement on 22 May 2012 in 
Kuala Lumpur, Malaysia and the Agreement had entered into force on 1 January 2013. WT/REG340/M/1 
 
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  1.7.  The Agreement was comprehensive and high-quality and built on the commitments made by 
both countries in the AANZFTA. Malaysia was Australia's ninth largest trading partner, with two-way trade valued at A$17.9 billion in 2013.  
1.8.  The Agreement met all the criteria of a hi gh quality agreement that promoted growth in 
goods and services trade. It was fully consiste nt with WTO principles and rules, delivered 
WTO-plus outcomes and was comprehensive and provided substantial liberalization across all sectors. It met the robust interpretation of the WTO threshold requirement that an agreement 
cover "substantially all trade" between the pa rties. The Agreement accelerated AANZFTA tariff 
elimination commitments for both countries and achieved a higher level of tariff elimination by Malaysia. Upon entry into force of the Agreement, Australia eliminated all tariffs on goods imported from Malaysia, that is, 100% tariff elimination from 1 January 2013, compared with 1 
January 2020 under AANZFTA. Malaysia had bound tariff-free access on 97.6% of recent Malaysian 
goods imports from Australia from the date of entry into force of the Agreement, which was expected to increase to 98.9% in 2016 and 99% in 2017. 
1.9.  The Agreement contained an AANZFTA-plus outcome on services, including through 
"AANZFTA-Plus" services commitments. Australia's commitments included increasing the bound Foreign Investment Review Board (FIRB) horizontal threshold applying to Australia's specific 
services commitments, as well as additional sector-specific commitments in areas such as private 
hospital services and hospital support services, research and development services, and some construction services. Malaysia's commitments included giving Australian entities the right to acquire majority ownership in selected areas across a range of sectors such as education, 
insurance and investment banking, telecommunications and professional services. 
1.10.  The Agreement also included measures which assisted companies doing business in 
Australia and Malaysia, including business friendly rules of origin provisions. For example, 
Australian exporters did not need to supply a certif icate of origin, but rather a simpler declaration 
of origin. The Agreement had useful commitments in  other trade-related areas, such as intellectual 
property, electronic commerce and the tempor ary entry and stay of skilled personnel. 
1.11.  Australia and Malaysia thanked the WTO Secretariat for the Factual Presentation and 
Members for their questions, both in writing and those the Parties anticipated receiving during the meeting. The Parties looked forward to a fruitful  discussion of the Agreement and would endeavour 
to answer additional questions as they arose. 
1.12.  The representative of the European Unio n thanked the Parties and the Secretariat for the 
material presented. Both Parties were important trading partners for the European Union. He 
noted that despite the very long implementation period envisaged by the Agreement, end of 2026, 
the bulk of tariff liberalization occurred at the beginning of implementation. With regard to services 
the EU noted that both Parties had made some improvements compared to their commitments in the GATS including commitments in sub-sector s for which the Parties did not have GATS 
commitments. However, he also noted that a number of sectors for which there were no GATS 
commitments, also had no commitments in the Agr eement. The EU looked forward to the results 
of the in-built five year  review and other review mechanisms su ch as the first review of services 
commitments to be completed by the end of 2015 and the first review of the Rules of Origin 
Chapter for which the final report was to be deliv ered by the end of 2016. In particular the EU 
asked what steps had been taken by Malaysia to review the tariff and other charges applied to alcoholic beverages by the end of 2015 and to include labour and environmental provisions. 
1.13.  The representative of Malaysia said that there was engagement on the review which would 
depend on the implementation process under the Agreement. On the question raised by the EU, 
responses had just been received from the capital and would be circulated immediately after the 
meeting. 
1.14.  The representative of Australia responded to the broader point raised by the EU in its 
questions related to the reviews. He noted that  negotiations had been concluded between the 
Parties on 13 March 2012 but in November 2012 leaders had taken the decision to launch RCEP 
negotiations in which both Malaysia and Australia have been very deeply involved since. In 
addition, both Parties were also involved in the Trans-Pacific Partnership (TPP) negotiations. So at present, two agreements involving the Parties ha d already entered into force, the AANZFTA and WT/REG340/M/1 
 
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  the Agreement, but in addition th ey were negotiating these plurilateral agreements. An issue that 
was emerging in these negotiations was that of the most appropriate architecture for a modern 
trade agreement and the Parties were grappling with this issue in some of the mega-regional negotiations. Under the Agreement and its institutional provisions, there was a requirement that 
the FTA Joint Commission meet within 12 months of entry into force of the Agreement. In fact it 
had not yet met not only because the Parties were busy with their negotiations, but there had also not been any implementation difficulties in the Agreement. Ministers had met in August and 
instructed the Parties to have a Joint Committee Meeting soon so it would occur soon. 
1.15.  The representative of Canada thanked the Parties for their responses and would ask further 
questions if any arose. 1.16.  The Chairman said that consideration of the Goods and Services Aspects of the Free Trade 
Agreement between Australia and Malaysia has allowed the Committee to clarify a number of 
questions and oral discussion of this RTA could be  concluded in accordance with paragraph 11 of 
the Transparency Mechanism. If any delegations wished to ask follow-up questions they were invited 
to forward submissions in writing to the Secretariat by 30 September 2014  and the Parties were 
asked to submit replies  in writing by no later than 14 October 2014. In accordance with 
paragraph 13 of the Transparency Mechanism all wri tten submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available on 
the WTO website. 
1.17.  The Committee took note of the comments made. 
 
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