The Malaysian Free Trade Agreement
October 27th, 2009 at 7:39 am by David Farrar- Malaysia is NZ’s eighth-largest market.
- NZ exports to it were worth $1 billion last year, and has grown 80% since 2004
- 99.5 per cent of NZ exports will be duty free within seven years.
- Kiwifruit exports will be duty free by 2012 – current tariff is 15%
- A “most favoured nation” clause which means Malaysia will automatically extend to New Zealand exporters the benefits of any other concessions it makes in subsequent free trade deals with other partners
The FTA negotiation started under Labour in 2005 and was concluded this year.
Related posts:
- Another free trade agreement
- Dom Post on Free Trade
- Free Trade prospects
- The US-Israel Free Trade Agreement
October 27th, 2009 at 7:56 am
Dounbtless there will be complaints from the economically illiterate, but this good news is fantastic; all credit to Labour and National for pulling this off.
Vote:October 27th, 2009 at 7:58 am
There have strong ties between Otago University and Malaysia since many Malaysians attended the former School of Mines then held professional and management positions in the tin mines. Some of these are now in influential positions in Malaysia and there are still strong ties between Otago Uni and Malaysia with a graduation ceremony being held there each year.
This sort of relation must have been an important contributing factor in reaching a successful agreement.
Two people I know lost their passports in KL. They searched among buses and taxis and an airport bus driver found them behind a seat on his bus. They were impressed with the helpfulness of the local people in helping to find them, especially the taxi drivers and airport bus managers and drivers.
Vote:October 27th, 2009 at 8:05 am
Oh fucking great another Asian free trade deal when all our kiwi factories are closing down as made in Asia work force is run on peanuts. What a loony country. Is that made in New Zealand said the tourist? Not here mate, said the unemployed tyre worker!!!!
Vote:October 27th, 2009 at 8:24 am
Come on dad it’s not like we had any tariffs to cut.
Vote:October 27th, 2009 at 8:27 am
Tell that to the family of the unemployed Firestone tyre worker this Christmas stephen.
Vote:October 27th, 2009 at 8:52 am
For every job you lose through imports, another is created through exports, and the new job pays better.
Vote:October 27th, 2009 at 8:52 am
D4J – how many tourists come here to buy tyres? I suspect the # is low…
Vote:October 27th, 2009 at 9:31 am
Dad, Unfortunately for them, the writing was on the wall for the Firestone crew 30 years ago. I clearly recall Cliff Hansen (president of the canterbury rubber workers union in the mid 1980′s) saying during one of their frequent strikes ” I don’t care if there is only one member of the union left, he will be paid what we think he is worth”!
Well, he eventually got his wish via an unsustainable cost structure.
Vote:October 27th, 2009 at 9:40 am
NOt1 .. as I understand it, the Riccarton plant specialised in short run, specialty tyres in sizes and profiles that are outside mainstream production alsewhere in the world and included classic and vintage. As such most were exported. So even that niche couldn’t support itself.
Vote:October 27th, 2009 at 9:45 am
Tell that to the family of the unemployed Firestone tyre worker this Christmas stephen.
Andrew W (1417) Vote: 0 0 Says:
October 27th, 2009 at 8:52 am
For every job you lose through imports, another is created through exports, and the new job pays better.
And the proof of that is where? In the xmas pudding the workers won’t be getting?
[DPF: The massive drop in unemployment as NZ got rid of trade barriers, leading to us (prior to credit crisis) having the lowest unemployment in the OECD, and the least protected economy]
Vote:October 27th, 2009 at 10:01 am
It is SO much easier to talk about a sudden plant closure than incremental increases in industries that are now allowed to compete on equal terms (in terms of tariffs and subsidies, not domestic regulations).
Vote:October 27th, 2009 at 10:26 am
“having the lowest unemployment in the OECD” during labour…..hehe
Totally agree though good news. Its nice that our two major parties both agree on free trade.
Pity its not the same in the states or EU
Vote:October 27th, 2009 at 11:09 am
Excuse me all you anti-free-trade luddites, did you notice that D4J agrees with you.
Vote:October 27th, 2009 at 12:46 pm
Free-trade is undeniably a good thing, provided you have a culture which values education and rewards hard-work and self-reliance. If you don’t, then you get all the losses, but none of the gain.
In the time that the Firestone factory has become uneconomic, Canterbury has created thousands of jobs in technology. I’m sure D4J could name half-a-dozen tech companies in Christchurch who employ 10 times the number of people as Firestone and many of which didn’t exist 20-30 years ago.
One problem in NZ is that have a welfare system which encourages people to stagnate. Loose your job. Rather than up-skill, our system gives people a multitude of ways not to move on (endless vocation-less training course, sickness benefit, DBP, etc).
If the safety net is too comfortable and all-encompassing, it robs the incentive for people to better themselves. And it forces us to over-tax everyone else, which is a drag on economic growth and encourages the most clever and productive to leave for better prospects overseas.
Vote:October 27th, 2009 at 1:58 pm
NZ exports to it were worth $1 billion last year, and has grown 80% since 2004………..Well NO, NZ exports were 854 $million and Malaya to us were $1.8 Billion.
[DPF: The massive drop in unemployment as NZ got rid of trade barriers, leading to us (prior to credit crisis) having the lowest unemployment in the OECD, and the least protected economy]……..Also the lowest increase in productivity during the past decade, the un-employment figures were a dishonest illusion, and why should the credit crisis make any difference to the stats, but you got the least protected economy part right, leaving us little to negotiate with. I’m not condemning these agreements just with-holding judgment until there is evidence of something other than loss of jobs.
Vote:October 27th, 2009 at 3:05 pm
Fonterra seems happy, so I’m happy. Better dealing with customers in Asia, closer markets, cheaper transporting costs. I hope trade within Asian markets grows, better then the extortion artists and backstabbers from in the EU.
Vote:October 27th, 2009 at 3:42 pm
We have to disengage from the moribund markets of Europe and the UK, and the increasingly protectionist US.
We are rapidly engaging with the growing markets of East Asia.
Furthermore these are the new rationalist cultures and not enslaved to eco-paganism or other environmentalist sects.
Malaysia is technically Muslim but is more pragmatic than most – being modified by Buddhism, Christianity and Confucianism.
The luddites should remember that protectionism extended the Great Depression for years. Even America seems to have forgotten that lesson. Mind you they dress it up as “buying local” and other green hundreds and thousands.
I look forward to the day when we trade in Yuen rather than the US dollar which seems destined to collapse.
Vote:October 27th, 2009 at 4:00 pm
“Also the lowest increase in productivity during the past decade, the un-employment figures were a dishonest illusion, and why should the credit crisis make any difference to the stats, but you got the least protected economy part right, leaving us little to negotiate with. I’m not condemning these agreements just with-holding judgment until there is evidence of something other than loss of jobs.”
First a point regarding your last, you assume there will be job losses, but the economic results shows the reforms of the 80′s showed did not lose us jobs. Some jobs may have disappeared, but it is easily argued that those jobs were actually costing us more than they were worth. In any case, the low unemployment rate shows that over the medium term, lowering protections didnt hurt us.
How did freeing up trade stall productivity? Or the same quesiton a different way round, how would continued protectionism improve productivity?
The thing that is completely missing from your argument is the improvement in the wellbeing of consumers because of freer trade. This is something that is constantly overlooked but is very very important, to the extent that any argument against free-trade that doesnt address it is worthless.
Vote:October 27th, 2009 at 5:29 pm
Kimble;…….I am not really arguing against the concept of free trade, my comments are mainly aimed at the unquestioning spin we are being fed when these agreements are signed. For instance the reports with both the Chinese and now Malaya emphasised the dollar amount of our exports to those countries without mentioning our imports from them. In each case about 75%-25% in their favour. An earlier agreement with Singapore saw their exports to us skyrocket while ours to them remained static, no doubt being a motivating factor to Malaya. Most of our major companies who have tried to set up over there have lost money or/and value due to unforeseen hurdles placed in their way. Protectionism is wrong but New Zealand shouldn’t be leading the world in unilateral dismantling of it anymore than we should be leading the world in penalising our people with the global warming fiasco.
Vote:October 27th, 2009 at 6:15 pm
I wonder how many people whining about the Firestone factory shutting are aware that the tariffs Otwat put on Chinese tyres probably had something to do with it?
Vote:October 27th, 2009 at 8:26 pm
backster, you have once again missed half the argument for free trade. You got close but no cigar.
“In each case about 75%-25% in their favour.”
So what you are saying is that we are importing goods from them that are cheaper (or even better, lets not be condescending) than we can produce here? The benefits to the consumer of these imports are substantial, and cannot be assumed away. Right, BERL?
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