Malaysia and Japan yesterday agreed to set up a free trade area (FTA) as part of a comprehensive economic relationship after resolving the last remaining differences in emergency, high-level talks.
"We have now finalized everything," International Trade and Industry Minister Rafidah Aziz told reporters after talks with Japanese Trade Minister Shoichi Nakagawa who arrived earlier yesterday for last-ditch efforts to salvage deadlocked negotiations on a planned free trade area.
"It will be a comprehensive economic framework agreement covering all the areas that we feel we would like to cover," Rafidah said.
PHOTO: AP
Talks between Japan and Malaysia began in Kuala Lumpur on Tuesday but had failed to produce a consensus on tariffs for industrial products, especially in the sensitive auto sector and steel industries of Malaysia, which Japan says is excessively protectionist.
"I have been saying that it is the final stretch that is the most difficult," Nakagawa said. The "trust and confidence" between the two countries had led to this "win-win relationship."
secret compromises
He and Rafidah refused to divulge the details of the compromises made in the auto and steel tariff structures with Nakagawa describing it as "a national secret."
Rafidah said that the comprehensive economic relationship will contain elements of the free trade area, which will be formally launched in December.
"What we have decided today will become the basis for an agreement in principle" that will be announced when Malaysian Prime Minister Abdullah Ahmad Badawi visits Tokyo on May 25-26 for a bilateral visit.
"It covers all areas -- goods, services, even agriculture and economic cooperation," she said.
Since launching the FTA talks in January last year, the two countries have reached a basic accord on agricultural and marine products. But outstanding issues remain, including Malaysia's tentative pledge to fully eliminate tariffs on imported vehicles by 2015. Japan wants an earlier deadline.
Malaysia imposes high import and excise duties on imported cars to protect its national Proton and Perodua cars from competition. The two carmakers jointly control 74 percent of the auto market in Malaysia, Southeast Asia's biggest passenger car market. Tariffs have recently been lowered for cars produced in Southeast Asian countries but other countries still face high barriers.
Japan also wants Malaysia to abolish tariffs on steel products used for vehicles and household appliances. It quoted unidentified Japanese government sources as saying that Malaysia is considering an immediate removal of tariffs for some car models that do not compete with Proton and Perodua.
Tariff variations
Rafidah said the FTA will contain some "early harvest programs," meaning a list of goods on which the tariff abolition and reduction will come into force immediately after the deal is signed in December. Other items will see the benefits of the FTA gradually.
"The mechanism for tariff cutting, tariff abolishment in terms of FTA will start as and when it is scheduled to start."
"Both sides are very happy ... As of now it is done. We are just going to shake hands afterward," she said.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
RSS