| 
Reset Setting Change contrast to brightChange contrast to originalChange contrast to darkChange to thin layoutChange to default layoutChange to wide layoutChange font size to lower sizeChange font size to original sizeChange font size to large size
T
T
T
T
T
T
  jata  Malaysia's Free Trade Agreements

 
FAQ
facebook twitter youtube blog
Malaysia - Turkey

BACKGROUND

  • The First meeting of the Malaysia-Turkey Free Trade Agreement (MTFTA) was held in Ankara on 31 May-1 June 2010.

  • A total of nine (9) rounds of MTFTA negotiations were held with the final or concluding round held on 13-15 January in Ankara, Turkey. The Agreement later was signed by YB. Dato' Sri Mustapa Mohamed Minister of International Trade and Industry, Malaysia and Hon. Nihat Zeybekci, Minister of Economy of The Republic of Turkey on 17 April 2014 in Ankara, Turkey.

  • MTFTA came into force on 1 August 2015.

  • Malaysia was able to lock-in tariff preferences that were either on par with, or better than, those previously granted under Turkey’s Generalised System of Preferences (GSP), which were no longer available for Malaysia, beginning 1 January 2014.  As such, with the signing and subsequent entry into force of MTFTA, Malaysian exporters can continue to gain preferential market access into and also remain competitive in the Turkish market.

TRADE WITH TURKEY

  • In 2015:

    • Malaysia’s trade with Turkey expanded by 78.1% to RM5.65 billion (US$1.44 billion) from RM3.17 billion (US$0.96 billion) in 2014.

    • total exports of merchandises increased by 54.5% to RM3.80 billion (US$0.95 billion) from RM2.56 billion (US$0.75 billion) in 2014.

    • total imports of merchandises increased by 159.8% to RM1.8 billion (US$0.43 million) as compared to RM710.7 million (US$216.7 million) in 2014.

  • Major exports to Turkey in 2015:

    • Palm Oil and Palm-Based Products

    • Textiles, Clothings & Footwear

    • Chemicals & Chemical Products

    • Manufactures of Metal

    • Rubber Products 

  • Major imports from Turkey in 2015:

    • Petroleum Products

    • Textiles, Clothing & Footwear

    • Chemicals & Chemical Products

    • Machinery, appliances & parts

    • Processed Food

SCOPE

Areas covered under MTFTA include:

  1. Initial Provisions

  2. General Definitions

  3. Trade in Goods

  4. Rules of Origin

  5. Customs Procedures and Cooperation

  6. Sanitary and Phytosanitary Measures

  7. Technical Barriers to Trade

  8. Trade Remedies

  9. Economic and Technical Cooperation

  10. Transparency

  11. Institutional Provisions

  12. Dispute Settlement

  13. General Exceptions

  14. Final Provisions

TRADE IN GOODS

  • The Agreement outlines commitments from both countries on liberalization of trade in goods. Malaysia and Turkey will progressively reduce or eliminate tariffs on substantial number of products traded between both countries.

  • The FTA will be realised over a period of 8 years. Turkey will grant preferential market access to Malaysian exports. Turkey will eliminate duties on 85.89% of tariff lines.


Malaysia’s Commitment

  • Malaysia's commitment involves tariff reduction/elimination on 98.86% from the total tariff lines based on modalities as follows:
 

Modalities

Description

 Tariff lines
(HS2007)

 %

Fast Track
(FT)

Immediate elimination on 1 August 2015

7317

70.38

Normal Track
(NT)

Gradually reduced and eliminated on 1 January 2018

1040

10.00

Sensitive Track (ST)

Gradually reduced and eliminated on 1 January 2020

1725

16.59

Highly Sensitive Track (HST)

Gradually reduced and eliminated on 1 January 2023

196

1.89


Turkey’s Commitment

  • Turkey will eliminate duties on 85.89% of tariff lines based on modalities as follows:  
 

Modalities

Description

Tariff lines
(HS2007)

%

Fast Track
(FT)

Immediate elimination on 1 August 2015

8309

68.70

Normal Track
(NT)

Gradually reduced and eliminated on 1 January 2018

302

2.50

Sensitive Track (ST)

Gradually reduced and eliminated on 1 January 2020

877

7.25

Highly Sensitive Track (HST)

Gradually reduced and eliminated on 1 January 2023

898

7.43

 
  • Upon entry into force of the FTA, Turkey import duties by 30% for palm oil products such as Crude Palm Oil, Processed Palm Oil, Crude Palm Kernel Oil and Processed Palm Kernel Oil. No further reduction will be given for these products. Including palm oil-based products, one off tariff reduction given to 322 tariff lines (2.67%) agricultural and fisheries products. Tariff for another 970 tariff lines (8.02%) will be at locked in at current rate for Malaysia. In essence, only 3.44% of Turkey’s tariff lines are excluded from the Agreement.

  • For textiles, Malaysian exporters are given immediate elimination of additional customs duties (ACD) which these safeguard duties are imposed over and above the MFN duties for selected textile products.

  • In the case of Malaysia, the elimination of duties by Turkey through MTFTA will compensate for the withdrawal of the GSP benefits previously offered by Turkey until 31 December 2013. Therefore, with the MTFTA, Malaysian exporters can continue to gain market access at preferential duties and remain competitive in exporting to Turkey, offering further advantages to Malaysian exporters.

EXPORT-IMPORT PROCEDURES

Exporting to Turkey

  • If you are exporting to Turkey, please click this link to check on the preferential duties under MTFTA:

Turkey - Schedule of Commitment

  • Nevertheless, in order for your products to enjoy the preferential duties, the products must first fulfill the Rules of Origin (ROO) criteria under MTFTA.

  • Products listed under Turkey’s Exclusion List (EL) do not qualify for duty reduction or elimination under MTFTA. The Turkish importers would need to pay the duty based on the effective MFN rate.

 

Calculation of Preferential Duties Reduction when exporting to Turkey - Turkey’s Schedule of Commitment

Fast Track
(FT)  

:

Immediate Elimination upon Entry Force of MTFTA

Note
All tariff lines with FT are already at 0% since 1 August 2015.

Normal Track (NT)  

:

Gradually reduced and eliminated on the 4th year from date of MTFTA is implemented

Step 1
Starting 1 August 2015, tariff will be gradually reduced and eliminated in four(4) equal annual stages.

Step 2
Check the Base Rate or tariff lines with NT

Step 3
Once the Base Rate is known: For example, if the Base Rate is 8%, starting from 1 August 2015, each year, the annual reduction % would be:

8%/4 = 2%

Starting 1 August 2015, the reduction would be:
(1st year) 1 August 2015 : 8%-2%= 6%
(2nd year) 1 January 2016 : 6%-2%= 4%
(3rd year) 1 January 2017 : 4%-2%= 2%
(4th year) 1 January 2018 and onwards: 2%-2%= 0%

Sensitive Track (ST)

:

Gradually reduced and eliminated on the 6th year from date of MTFTA is implemented

Step 1
Starting 1 August 2015, tariff will be gradually reduced and eliminated in six (6) equal annual stages.

Step 2
Check the Base Rate or tariff lines with ST

Step 3
Once the Base Rate is known, for example if the Base Rate is 8%, starting from 1 August 2015, each year, the annual reduction % would be:

8%/6 = 1.33%

Starting 1 August 2015, the reduction would be:
(1st year) 1 August 2015   : 8%-1.33%= 6.67%
(2nd year) 1 January 2016 : 6.67%-1.33%= 5.34%
(3rd year) 1 January 2017 : 5.34%-1.33%= 4.01%
(4th year) 1 January 2018 : 4.01%-1.33%= 2.68%
(5th year) 1 January 2019 : 2.68%-1.33%= 1.35%
(6th year) 1 January 2020 : 1.35%-1.33% = 0.02% (0%)

Highly          Sensitive Track (HST)

:

Gradually reduced and eliminated on the 9th year from the date of MTFTA enter into force

Step 1
Starting 1 August 2015, tariff will be gradually reduced and eliminated in nine (9) equal annual stages.

Step 2
Check the Base Rate or tariff lines with HST

Step 3
Once the Base Rate is known, for example if the Base Rate is 8%, starting from 1 August 2015, each year, the reduction would be:

8%/9 = 0.89%

Starting 1 August 2015, the reduction would be:
(1st year) 1 August 2015   : 8%-0.89%= 7.11%
(2nd year) 1 January 2016 : 7.11%-0.89%= 6.22%
(3rd year) 1 January 2017 : 6.22%-0.89%= 5.33%
(4th year) 1 January 2018 : 5.33%-0.89%= 4.44%
(5th year) 1 January 2019 : 4.44%-0.89%= 3.55%
(6th year) 1 January 2020 : 3.55%-0.89%= 2.66%
(7th year) 1 January 2021 : 2.66%-0.80%= 1.77%
(8th year) 1 January 2022 : 1.77%-0.89%= 0.88%
(9th year) 1 January 2023 and onwards: 0.88%-0.89%= 0%                                              

 

Importing from Turkey

  • If you are importing from Turkey, please click this link to check on the preferential duties under MTFTA:

Malaysia - Schedule of Commitment

  • Nevertheless, in order for the product to enjoy the preferential duties, it must fulfill the Rules of Origin (ROO) criteria under MTFTA.

  • Products listed under Malaysia’s Exclusion List (EL) do not qualify for duty reduction or elimination under MTFTA. The Malaysian importer would need to pay the duty based on the current MFN rate.

RULES OF ORIGIN

SERVICES

  • Services/Investment was not in the Scope of MTFTA that was signed on 17 April 2014 and came into effect on 1 August 2015.

  • Based on Article 14.3 (Evolutionary Clause), Malaysia and Turkey may consider negotiating the Services/ Investment Chapter, 1 year after the entry into force of the Agreement.

CONTACT US

For Preferential Certificate of Origin / Rules of Origin related matters, please contact:

  1. Ms. Suhaili Ismail
    DL: 03 - 6208 4717
    Email: suhaili.ismail@miti.gov.my / allofficerskpi@miti.gov.my
    Division: Trade and Industry Support

  1. Ms. Shazila Sharudin
    DL: 03 - 6208 4727
    Email: shazila@miti.gov.my / allofficerskpi@miti.gov.my
    Division: Trade and Industry Support

 

For other enquiries, please contact the FTA focal point(s) as follows:

  1. Mr. Lim Chee Hau
    DL: 03 - 6200 0448
    Email: limcheehau@miti.gov.my

  2. Ms. Nurul Aini Ramly
    DL: 03 - 6208 4805
    Email: nurulramly@miti.gov.my

  mida matrade mpc sme_corp hdc midf sme_bank mai msi gov