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  jata  Malaysia's Free Trade Agreements

 
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ASEAN - Japan

BACKGROUND

  • ASEAN and Japan first established informal dialogue relations in 1973, which was later formalized in March 1977 with the convening of the ASEAN-Japan Forum. Since then, significant progress has been made in all areas economic cooperation.

  • Japan’s strong commitment to support ASEAN Community building is evident through its initiatives and support for many concrete and mutually beneficial activities. ASEAN robust economic growth has also contributed to the strengthening of relations with Japan.

  • The Framework for Comprehensive Economic Partnership (CEP) between ASEAN and Japan was signed by the Leaders of ASEAN and Japan on 8 October 2003 in Bali during the ASEAN-Japan Summit. Under this Framework Agreement, all the Parties had committed to a CEP between ASEAN and Japan, to strengthen economic ties, create a larger and more efficient market with greater opportunities and larger economies of scale, and enhance attractiveness to capital and talent, for mutual benefit.

  • Following the signing of the Framework Agreement, negotiations on the ASEAN-Japan CEP (AJCEP) Agreement was commenced in April 2005, and after 11 rounds of negotiations, it was substantially concluded in November 2007.

  • The ASEAN Member States and Japan signed the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) on 14 April 2008. The Agreement entered into force on 1 December 2008. For Malaysia, it entered into force on 1 February 2009.

  • Although the AJCEP is based on the respective bilateral Economic Partnership Agreements (EPAs) signed by Japan with individual ASEAN countries, including Malaysia, there is substantial value-adding to these EPAs under the AJCEP.

SCOPE

  • ASEAN-Japan Comprehensive Economic Partnership (AJCEP) Agreement is a comprehensive agreement which include Trade in Goods and Trade in Services, Trade in Investment, Rules of Origin (ROO), Sanitary and Phyto-Sanitary (SPS), Technical Barriers to Trade (TBT), Dispute Settlement Mechanism (DSM) and Economic Cooperation.

  • The AJCEP are fully realised by ASEAN-6 (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) and Japan in 2015 when tariffs on substantially all products have been eliminated, except for those on the Sensitive Track. As of 2015, Malaysia has eliminated duties for 93.57% of products in the normal track.

  • The negotiations on Trade in Services including the Financial and Telecommunication annexes and Movement of Natural Persons (MNP) Chapters as well as the investment negotiation under the ASEAN-Japan have been concluded. ASEAN and Japan is currently undertaking discussion on the legal instrument to implement the outcomes of these negotiations which is expected to be finalized by 2016.

BENEFITS

  • Benefits to Malaysia's consumers and business community will be significant as Japan is Malaysia's 4th largest trading partner.

  • A key benefit is market access through lower tariff concessions and cumulative rules of origin, and hence more competitive prices and greater choice of products for consumers. 

  • Overall, Japan continue to remain an important trading partner of ASEAN (2nd largest partner) and a source country for FDI (2nd largest source).

  • In 2015, the two-way trade between ASEAN and Japan reached USD 239.4 billion, accounting for 10.5 per cent of ASEAN’s total trade. Japan is the ASEAN’s second largest trading partners after China.

  • Foreign direct investment (FDI) inflow from Japan to ASEAN amounted to USD 17.4 billion in 2015. Japan remained the second largest source of FDI for ASEAN accounting for 14.5 per cent of total FDI inflow into ASEAN. EU countries as a group are the leading investor in ASEAN.

  • The FTA is enabling ASEAN and Japan to share the huge resources available through joint collaboration to further promote the growth of both the manufacturing and services industries.

  • The AJCEP Agreement offers traders in Malaysia the advantage of cumulation to more easily meet ROO. Traders can enjoy a larger sourcing base, i.e. they can use raw/intermediate materials from any of the AJCEP parties and enjoy preferential tariffs.

  • For Malaysia, the AJCEP provides additional benefits in terms of immediate and accelerated elimination of duties for products vis-à-vis progressive liberalization under the bilateral agreement with Japan i.e. Malaysia-Japan Economic Partnership Agreement (MJEPA). Some of the products which were not offered by Japan under MJEPA and had duty liberalized under AJCEP Agreement.

CONTACT US

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

  1. Ms. Sazatul Faeza Alias
    DL: 03-62084751
    Email: sazatulfaeza@miti.gov.my

  2. Mr. Aizul Kamil Ibrahim
    DL: 03-62084718
    Email: aizul@miti.gov.my

 

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

  1. Mr. Guna Seelan a/l Balakrishnan
    DL: 03-62000379
    Email: gunaseelan@miti.gov.my
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