Japan, Malaysia to sign free trade pact ----------------------------------------------------- Tuesday, December 13, 2005 (Kuala Lumpur):
Japan and Malaysia are signing a pact that will do away with almost all tariffs in 10 years, encouraging the flow of Japanese cars, Malaysian mangos and other products between the Asian nations.
The deal falls short of a full-fledged free trade agreement because of exemptions that amount to 3 per cent of the value of trade between the two nations, Japanese officials said.
Some tariffs, such as those on Japanese pears and Malaysian papayas, will end immediately while others will end gradually.
Cuts on tariffs for cars that compete with Malaysia's national car, the Proton, will go into effect only in 2015, though they will be lifted for larger cars that don't compete with the Proton by 2010.
The thriving Asian market, including Malaysia, offers a huge potential for growth for Japan's booming automakers, such as Toyota Motor Corp. and Honda Motor Co.
The pact - which also covers cooperation in services, education, investment, business promotion and science - marks a big step toward the free flow of goods between the two nations/
According to the Japanese, trade between the two countries totals nearly $25 billion a year.
Japan has been nervous about falling behind China and South Korea on free trade agreements, and officials say they are speeding up efforts to reach deals with Asian nations.
Japan only has two free trade deals so far, with Mexico and Singapore.
It is in talks with the 10-member Association of Southeast Asian Nations, the Philippines, Thailand, South Korea, Indonesia and Canada. (AP)