Malaysia Trade and Economic

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• Bilateral Agreements

Malaysia Trade and Economic

Malaysia is currently New Zealand’s ninth largest trading partner (by value) and twelfth largest export market. Two-way trade between New Zealand and Malaysia was valued at around NZ$2.3 billion for the year to December 2011, having reached a peak of NZ$2.93 billion for the year to December 2008. The cause of the decline is likely to be, at least in part, a result of the general fall in demand caused by the global recession, and figures have been trending upwards since 2009.

Bilateral trade with Malaysia reached NZ$2.3 billion for the year ending December 2011. New Zealand’s merchandise exports to Malaysia were NZ$875 million. Over the same period New Zealand’s merchandise imports from Malaysia were NZ$1.4 billion.

Milk and cream (NZ$341 million) remained New Zealand's largest export to Malaysia in the year to December 2011. Other key exports included milk powder ($50m), butter ($61m), and sheep and goat meat ($51m).

Petroleum products continue to represent a significant share (one third) of imports from Malaysia. In the December 2011 year, crude oil imports totalled NZ$427 million. Other significant imports were television receivers ($161m) and machinery ($136m).

These figures understate the value of our commercial relations with Malaysia, as a proportion of New Zealand exports enter Malaysia via Singapore. More significantly, they do not recognise the significant activities of New Zealand services suppliers in Malaysia. 20,165 Malaysians visited New Zealand in the year to June 2010. This contributes an estimated NZ$55 million to the New Zealand economy.

A Working Holiday Arrangement (concluded in 1996 to allow 100 places in each direction) has been expanded to allow for up to 1100 young Malaysians each year to live and work in NewZealand for up to six months.  In the 2008/09 year 875 Malaysians took up this offer, following a high of 1052 in the previous year. An “Open Skies” Air Services Agreement dates back to 1998. 

Malaysia and New Zealand share close education links, with many New Zealand universities having well established contacts and formal agreements with Malaysian education providers. The New Zealand private sector also has education links with Malaysia. Malaysia is an important source of overseas students, which contribute an estimated NZ$80 million to the New Zealand economy.

Investment is another aspect of the New Zealand/Malaysian economic relationship.  About 20 New Zealand companies have significant investments in Malaysia covering a wide variety of sectors, including food/food technology, ICT and telecommunications, electronics, software, information technology, and building products.  Malaysian businesses have invested in the hotel and property sectors, forestry, fisheries, engineering and food processing in New Zealand as well as in a major consultancy group.  Business Councils are established in New Zealand and Malaysia and provide excellent sources of local networks and contacts for businesses in each market.

The trading relationship is underpinned by cooperation at the official level. A bilateral Trade Agreement between New Zealand and Malaysia was signed in 1997, and entered into force on 1 January 1998. Bilateral Free Trade Agreement negotiations were launched in March 2005. The Malaysia-New Zealand Free Trade Agreement was signed in October 2009, and entered into force for both parties in August 2010.