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Tuesday, 27 November 2012
Page: 13603

Mr CRAIG KELLY (Hughes) (17:36): I rise to speak on the Customs Amendment (Malaysia-Australia Free Trade Agreement Implementation and Other Measures) Bill 2012 and the Customs Tariff Amendment (Malaysia-Australia Free Trade Agreement Implementation) Bill 2012. I support the comments of the member for Stirling, and the member for Forrest, who I understand will also be speaking on this bill. This agreement was signed in May this year, but it is worth noting that its origins go back to the previous Howard government where the process was started in May 2005. It has been a seven-year journey to get us to where we are today. Also, from personal experience, I am very glad to see this bill before the parliament and to speak on it today. Before I entered parliament, I had the opportunity to travel to Malaysia and participate in trade exhibitions in Kuala Lumpur. I was involved in several successful contracts to export goods from Australia, particularly from the electorate of Hughes, to Malaysia. In dealing with Malaysians, I have found them to be very tough negotiators but at the same time very fair. It is great to see this bill before the parliament today.

I would like to note how our exporters and how our businesses have been working a lot with Malaysia over the last decade. While the government introduced its white paper on Asia earlier this year—and we actually thought the government had only just discovered Asia—over the last decade we have seen two-way trade between Australia and Malaysia increase by more than 100 per cent. According to Austrade, at the moment there are about 3½ thousand Australian companies exporting to Malaysia each year and Austrade estimates that there are around 250 Australian companies with some form of representation in Malaysia. Our businesses have been out there, engaging with Malaysia and increasing the two-way trade. However, although we have seen an increase in our trade with Malaysia over the last decade, we currently have a large trade imbalance. At the moment, Malaysia is our 10th largest trading partner, only behind China, Japan, the US, Singapore, the UK, Republic of Korea, New Zealand, Thailand and Germany. However, last year we imported $9.9 billion worth of goods and services from Malaysia, but we are only exporting $6.1 billion worth of goods to Malaysia. We do have a fairly large trade imbalance with Malaysia at the moment. We also have an imbalance with our investments with Malaysia. While Malaysian investments in Australia last year totalled $14 billion, Australian investments in Malaysia for the last year totalled only $5.7 billion. So we have a fair way to go to catch up.

Of the particular trade between Australia and Malaysia for 2011, most of the Australian goods that we exported to Malaysia were crude petroleum, which was worth $760 million; copper, $648 million; coal, $344 million; and wheat, $303 million. They were major exports. In our services sector to Malaysia last year education related travel was a total of $759 million—quite significant amounts of money. For our imports from Malaysia, crude petroleum is currently one of our major imports at over $3 billion. We are also importing $646 million worth of monitors, projectors and televisions from Malaysia. Another $556 million worth of computers are imported from Malaysia, and a further $378 million of refined petroleum.

Going to the details of this bill, we should firstly note that even before this bill came in, much of the merchandise trade between Australia and Malaysia already takes place at either zero or very low tariffs. When the scoping study was undertaken, one of the things that was noticed about the impediments to our trade between Australia and Malaysia, was that Malaysia not only has tariffs but also has further barriers with non-tariff measures such as import licensing and quotas, which restrict our exports to Malaysia, especially in agricultural products.

This free trade agreement will see the elimination of 94.8 per cent of Malaysia's tariff lines for exports of Australian goods to Malaysia. That will increase to 98.6 per cent by 2016. In return, Australia will simply eliminate all tariffs on Malaysian goods. We will also benefit by Malaysia removing the quantitative restrictions on their car imports, and they will increase tariff quotas on a number of agricultural products. We are looking for more sales of our agricultural products, especially liquid milk and rice.

However, here in Australia, when we negotiate these free trade agreements—which everyone on the coalition side is in agreement with—we must remember that there are some impediments to our two-way trade and things that will put our nation at a competitive disadvantage. Malaysia, our 10th largest trading partner, does not have a carbon tax, so where we are putting a carbon tax on goods produced in Australia and we have a free trade agreement with Malaysia it will simply transfer the production of those goods from Australia, where that tax is paid, to Malaysia, where that tax is not paid.

In conclusion, our economic relationship with Malaysia is very strong. This bill should strengthen it and lead to further strong ties between our two countries.