Malaysia/Australia Free Trade Agreement

Australia and Malaysia commenced negotiations for a Free Trade Agreement in April 2005.
The agreement was signed in May 2012.

Australia has agreed to give tariff-free access to all Malaysians goods from the implementation date, and Malaysia will give immediate tariff-free access for some products, and for 99% of all goods by 2020. The main advantage for Australian industry is that Australian car parts and large cars will have tariff-free access to Malaysia from the implementation date. Some Malaysian restrictions on investment in private education, telecoms and insurance have also been reduced or removed.

The most glaring omission from the agreement is the lack of labour and environment chapters, despite the fact that Australian Labor Party trade policy in December last year contained commitments to include enforceable labour rights and environmental standards in trade agreements. Side letters to the agreement state that the two governments will implement what emerges on labour and environment in the Trans-Pacific Partnership negotiations, but this may not happen. The ACTU has condemned this failure to implement the government’s policy.

Go to ACTU statement

However, some aspects of the agreement are more positive, in that they do not have some of the worst features of the neo-liberal models of trade agreements. Importantly, the Australian government has kept to its policy of not giving international investors the right to sue governments for damages over public regulation, so there is no investor-state dispute process in the agreement. This is a positive example.

The services chapter uses a positive list approach, which means it includes only those services which each government intends to include, rather than a negative list which includes everything unless excluded. Government procurement is excluded from the agreement. The intellectual property chapter does not contain the harmful provisions to extend patent rights on pharmaceuticals which are in the US-Australia free trade agreement, let alone the extreme measures which the US has proposed in the TPPA. However, the agreement does contain stronger provisions on copyright and stronger measures for enforcement of copyright and intellectual property rights more generally, including criminal penalties.

Overall, the agreement pursues a course towards zero tariffs without basic protections for workers’ rights, which we know will encourage a race to the bottom on wages and conditions. However, the fact that it does not include some of the most extreme measures on investor rights and intellectual property rights provides some useful examples for our campaign against them in other agreements.