China and Asean are scheduled to lower tariffs on industrial goods from July 20, International Trade and Industry Minister Datuk Seri Rafidah Aziz said today. The tariff reduction is the second phase of the strategy to forge an Asean-China Free-Trade Area (ACFTA) which was supposed to come into effect on July 1.
"The time extension is to allow the relevant authority, namely Customs, to iron out the new tariff structure and procedures," said Rafidah after attending the ministry’s Family Day celebration.
"Malaysia is not the only one getting an extension. There are other Asean countries that will start the trade agreement with China on July 20 in order to prepare for the new system." The formalisation of ACFTA indicates the start of economic integration between Asean and China in a concrete manner. "With China opening its market even wider for the entry of Asean goods, it is therefore expected that Asean’s exports to China would increase, especially from Malaysia, as we are very aggressive in marketing our products to China." While not indicating specific trade growth projections, Rafidah was optimistic that the trade arrangement would stimulate Malaysian exports to China.
Products covered in the normal track schedule will be subject to tariff reduction and elimination in four stages between 2005 and 2010, reducing gradually from 20 per cent to zero and five per cent. Tariffs on products in Malaysia’s sensitive list (which includes cement) will be reduced to 20 per cent in 2012 and subsequently, zero and five per cent in 2018. The tariff rates and implementation timeframe of the sensitive track will be reviewed in 2008 with a view to further improve market access conditions.