MALAYSIA SIGNS FTA WITH CHILE, ITS FIRST WITH LATIN AMERICA

From Siti Hawa Othman

YOKOHAMA, Nov 13 (Bernama) -- Malaysia and Chile signed the Malaysia-Chile
Free Trade Agreement (MCFTA) here Saturday, marking Malaysia's first bilateral
FTA with a Latin American country.

It was also Malaysia's fourth bilateral FTA after the Malaysia-Japan tie in
2005, Malaysia-Pakistan in 2007 and Malaysia-New Zealand in 2009.

Deputy Minister of Foreign Affairs, Richard Riot Jaem, signed on
behalf of the Malaysian government while Minister of Foreign Affairs of Chile
Alfredo Moreno Charme signed for Chile.

The signing was witnessed by Deputy Prime Minister Muhyiddin Yassin
and Chilean President Sebastian Pinera.

In his address, Muhyiddin said although the FTA was confined to trade in
goods and economic cooperation, both countries were committed to working towards
a comprehensive agreement which would include services and investment within two
years after the entry into force of this agreement by the first half of 2011.

"With this agreement, trade between both countries is expected to
further increase and this would also be a vehicle for Malaysia's expansion into
the Latin American market," said Muhyiddin who is in Japan for the APEC
Economic Leaders Meeting (AELM).

The FTA which would eliminate duties for almost all products within five
years, would also give plenty of scope for both countries to diversify
their range of exports.

Meanwhile, a jubilant Pinera said this was Chile's first FTA signed with a
member of Asean and was indeed a historic day for both countries.

"In 2010, our trade accounted for US$350 million and we hope to double this
within next year."

With the agreement, he said Chilean products, in particular its agricultural
produce, would have significant access into the Malaysian market.

Meanwhile, a statement released by the Ministry of International Trade and
Industry said the agreement followed the conclusion of negotiations between
Malaysia and Chile in May 2010 in Santiago after several rounds of negotiations
which began in June 2007.

MCFTA encompasses liberalisation in trade in goods as well as enhancement of
bilateral economic cooperation.

Bilateral trade between both countries grew from RM898 million (US$1=RM3.09)
in 2007 to RM1.05 billion in 2008, before slowing to RM788.8 million in 2009.

However, it made a remarkable recovery this year, with trade amounting to
RM853.7 million for the first nine months of this year, with exports accounting
for RM199.8 million and imports RM653.9 million.

Malaysia's major exports included electrical and electronic products, rubber
products, wood products and chemical and chemical products while imports were
manufactures of metal, metalliferous ores and metal scrap, chemicals and
chemical products, paper and pulp products and fruits.

Meanwhile, areas of cooperation which Malaysia and Chile have agreed to
undertake include research and development and innovation, science and
technology, trade and investment, mining and mining-related industry, SMEs,
intellectual property, tourism, education and human capital development, culture
and promotion of tourism.

The FTA will benefit Malaysian exporters as Chile will undertake full
elimination of import duties for 6,960 tariff lines (90.2 per cent of total
tariff lines) upon entry into force of the agreement while Malaysia will take
full elimination of import duties for products comprising 9,311 tariff lines
(89.5 per cent).

-- BERNAMA



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