Australia, KL explore free trade deal

Australia, KL explore free trade deal

Reuters Melbourne

Australia and Malaysia agreed on Monday to start preliminary talks on a free trade agreement, part of a push by Canberra for a regional trade deal with the 10 members of the Association of South East Asian Nations (ASEAN).

"Today we have agreed to undertake a scoping study on a possible bilateral free trade agreement," Australian Minister for Trade Mark Vaile told reporters.

If the study shows a free trade deal to be worthwhile, the two countries would start formal negotiations, he said.

Malaysian Trade Minister Rafidah Aziz said Malaysia hoped to complete the study in six months.

Australia has sealed free trade deals with two ASEAN members, Singapore and Thailand, in the past 18 months.

Two-way trade between Australia and Malaysia stands at about A$6.4 billion (US$4.5 billion) a year, Australian government figures show, but the balance is tilted in Malaysia's favor.

Australia, a leading agricultural exporter, also struck a free trade deal with the United States this year and has started a study with China to see if free trade talks would be feasible.

An ASEAN summit in Laos in November will aim at negotiating a region-wide pact with Australia and New Zealand.

Two-way merchandise trade between Australia and ASEAN was worth A$34.6 billion in the year to June 2003, up 58 percent from 1998.

ASEAN groups Brunei, Cambodia, Laos, Indonesia, the Philippines, Malaysia, Myanmar, Singapore, Thailand and Vietnam.