Malaysia-Australia FTA not living up to expectations

By SHAHEERA AZNAM SHAH / Pic By TMR File

Despite a bilateral free trade agreement (FTA), Malaysia’s and Australia’s trades have actually declined due to the lack of promotions and marketing, according to an Australian consultancy.

Connect Malaysia principal consultant Joe Perri said trade between Malaysia and Australia has been declining since 2015 although both countries had signed an FTA in January 2013.

He said part of the decline is due to the failure of both countries to fill out the agreement while it was still fresh.

“Economic ties like the FTA only have a brief moment in the spotlight, with much political display supported by large scale of trade missions before the two partners detach themselves and turn their attention to the next agreement,” Perri said in statement yesterday.

According to Malaysia External Trade Development Corp statistics, Malaysia’s exports to Australia stood at RM26.74 billion in 2016, a drop from RM28.08 billion recorded in 2015.

Austral ia’s exports to Malaysia was A$14.81 billion (RM 48.05 billion) in 2016, a 7.4% drop from A$15.99 billion registered in 2015.

He said trade agencies will have to play their part during the post launch which often seen to be under sourced and voluntarily-based organisations.

Malaysia’s and Australia’s trade figures peaked after the signing of the FTA.

“Both trade figures between Malaysia and Australia over the five years prior to 2016 were positive, but mirrored an equally significant downturn between 2015 and 2016.

“Australia registered a lower trade value to Malaysia in 2016 than the value before the trade agreement was established,” he said, adding that the trend should be a concern for the Australian government.

He said the issue should be discussed in the 2018’s Joint Trade Committee (JTC) ministerial meeting, which will be hosted by Malaysia.

“The JTC has achieved much in the past as it provides a platform to reassess the economic relationship’s format and structure.

“Next year’s JTC should be taken as an opportunity for businesses and governments to share information and experiences gathered in order to improve the FTA and reinvigorate the exports,” he said.

Malaysia has entered into an FTA with Australia to spur the business ties between the two countries.

“A Malaysia-Australia FTA was a natural and expected progression and reflection of the longstanding close relationship enjoyed by Australia and Malaysia,” he said.