Overview

• Preparatory work to establish a Japan-Malaysia Economic Partnership Agreement (JMEPA) commenced in February 2003 and involved government officials, representatives of trade and industry and academicians in a Joint Study Group.
• The Prime Ministers of Malaysia and Japan agreed on 11 December 2003 , to commence formal negotiations. Negotiations were held in Kuala Lumpur and Tokyo in 2004 and 2005.
• Agreement in principle was reached on 25 May 2005 between the Prime Minister of Malaysia and the Prime Minister of Japan on the key elements of the JMEPA.

• The JMEPA consists of an FTA component and bilateral economic cooperation. The implementation of tariff concessions would be over 10 years with flexibility for selected sensitive products.
• The FTA component covers: trade in industrial and agricultural goods, trade in services, investment, rules of origin, customs procedures, standards and conformance, intellectual property, competition policy, enhancement of business environment, safeguard measures and dispute settlement.
• Cooperation areas included are: agriculture, forestry and commodities, education, human resource development, information and communication technology (ICT), small and medium enterprises, science and technology, tourism and environment.

• Negotiations were concluded in October 2005.
• The Agreement was signed by both Prime Ministers on 13 December 2005 in Kuala Lumpur and came into force on 13 July 2006.
• The First Malaysia-Japan Joint Committee (JC) Meeting of the JMEPA was held on 13 July 2006 in Tokyo, Japan to adopt the rules, procedures, and financial arrangements of the JC; operational procedures to implement the Rules of Origin necessary to confer preferential tariffs under the JMEPA; and the decision on the implementation of tariff rate quota (TRQ).
• The Second JC Meeting of the JMEPA was convened on 5 December 2008 to brainstorm preliminary discussions on the monitoring of JMEPA implementation as well as adopt the amendments on product specific rule of yarn which was recommended by the Sub-committee of ROO.

• The JMEPA would allow Malaysia to maintain if not expand its share of the Japanese market for Malaysian exports through preferential tariff treatment and technical collaboration to meet requirements on standards and technical regulations .
• Malaysia would also be able to enhance its position as an attractive destination for Foreign Direct Investment (FDI), particularly in relation to competition from other investment seeking countries in the region.
• The cooperation and collaboration activities envisaged under the JMEPA would promote the growth of new sectors such as high-tech industries, including biotechnology, services including manufacturing related services and ICT and multimedia.
• For SMEs, economic and technical cooperation would facilitate quality enhancement, vendor development and inclusion of Malaysian SMEs into the manufacturing supply chain of Japanese multinational companies.

Modality

Trade In Goods

Rubber and Rubber Product

These are list of products offered by both countries.

Tariff Reduction Schedule

• Malaysia
• Japan

Rules of Origin

Minimum Data Requirement for Certificate of Origin

In order for Malaysian exporters to enjoy the tariff concessions offered by Japan under the MJEPA, they must comply with this Specific Rules (PSR).

Malaysia-Japan Bilateral Trade

• In 2011, Malaysia’s export of rubber and rubber products to Japan were valued at RM 934.79 million, an increase of 8.0% from RM 865.90 million in 2010.


• In 2011, Malaysia’s import of rubber and rubber products from Japan were valued at RM 918.38 million, an increase of 4.8% from RM 875.95 million in 2010.

• World NR Producing Countries:
  1. Thailand
  2. Indonesia
  3. Malaysia


• Major NR importing countries from Malaysia in 2011
  

  Ranking	Countries	Ranking	Countries	Ranking	Countries
  1	China	6	Netherlands	11	Finland
  2	Germany	7	Portugal	12	France
  3	South Korea	8	Brazil	13	Belgium
  4	USA	9	Turkey	14	South Africa
  5	Iran	10	United kingdom	15	Taiwan

• In 2011, Malaysia’s export of natural rubber to Japan was valued at RM 82.64 million (5,176 tonnes), a decrease of 31.7% from RM 121.09 million (10,837 tonnes) in 2010.


• Major natural rubber exported in 2011:
  - Latex valued at RM 57.56 million (3,511 tonnes);
  - SMR CV 60 valued at RM 7.53 million (499 tonnes); and
  - SMR L valued at RM 5.46 million (364 tonnes).


• Major natural rubbers exported in 2010 were:
  - Latex valued at RM51.84 million
  - RSS 3 valued at RM37.28 million , and
  - SMR CV 60 valued at RM8.42 million

• In 2010, Malaysia’s import of natural rubber was valued at RM 40,352 an increase of 164.0% from RM 15,284 in 2009. In 2011, no import of natural rubber from Japan was recorded.

Rubber Products

• In 2011, Malaysia’s exports of rubber products to Japan were valued at RM 834.53 million, an increase of 16.2%, from RM 718.25 million in 2010.


• Major rubber products exported in 2011:
  • Gloves, other than surgical gloves valued at RM 500.47 million;
  • Golf balls valued at RM 70.39 million, and
  • Surgical gloves valued at RM 55.94 million.
• Major rubber products exported in 2010 were:
  • Rubber; Vulcanised (Other Than Hard Rubber), Gloves, Mittens And Mitts, Other Than Surgical valued at RM425.01 million.
  • Gymnastics, Athletics, Other Sports (Includes Table Tennis) Or Outdoor Games Equipment, Not Exceeding.S. In This Chapter, Swimming Pools And Paddling Pools ; Golf Balls worth at RM69.24 million, and
  • Rubber; Vulcanised (Other Than Hard Rubber), Surgical Gloves, Mittens And Mitts worth at RM44.49 million.

• In 2011, Malaysia’s imports of rubber products from Japan were valued at RM 320.78 million, an increase of 7.8%, from RM 297.68 million in 2010.


• Major rubber products imported in 2011:
  • Other articles of unhardened vulcanised rubber valued at RM 54.07 million;
  • New pneumatic tyres, of rubber, of a kind used on Motor cars (including station wagons and racing cars) valued at RM 51.83 million; and
  • Other than pipe seal rings: gaskets, washers and other seals valued at RM 41.48 million.
• Major rubber products imported in 2010 were:
  • Rubber; New Pneumatic Tyres, Of A Kind Used On Motor Cars (Including Station Wagons And Racing Cars) valued at RM51.30 million,
  • Rubber; Other Than Cellular, Vulcanised (Other Than Hard Rubber), Gaskets, Washers And Other Seals, Other Than Pipe Seal Rings valued at RM44.81 million and,
  • Rubber; Other Than Cellular, Vulcanised (Other Than Hard Rubber), Not Elsewhere Specified In 4016.99.100 - 4016.99.922 worth at RM14.18 million.

There were 32 Japan rubber and rubber products projects were approved amounted to RM258.81million from year 2001 until 2010 (Table 6).

Overview

• Cooperation between ASEAN and China was elevated to a higher level with the signing of the Framework Agreement on Comprehensive Economic Cooperation by the ASEAN and China Heads of State / Government on 4 November 2002 in Phnom Penh, Cambodia.
• The Framework Agreement which came into force on 1 July 2003 is an umbrella Agreement which provides general provision on the establishment of an ASEAN-China Free Trade Area (ACFTA) within 10 years by pursuing:
  • progressive elimination of tariffs and non-tariff barriers;
  • progressive liberalisation of trade in services and investment;
  • strengthen trade facilitation measures; and
  • economic co-operation in areas of common interest.

Trade in Goods

• Tariffs have been reduced from 1 January 2004 by the six original ASEAN member countries (ASEAN-6) and China. Duties were eliminated on 1 January 2006.
• Malaysia 's products under the EHP:
  

  -	503 unprocessed agriculture products; and textiles and fabrics;
  -	footwear;
  -	ceramic products;
  -	articles of iron and steel; and
  -	electrical products.
  -	87 specific manufactured products such as coffee, animal and vegetable fats/oils, cocoa and cocoa preparations, mineral fuels (coal/coke), soap, stearic acid, article of rubber and glass envelope for Cathode-Ray Tube (CRT).

• Tariff liberalisation on all other products (other than EHP) has been implemented beginning 1 July 2005 and to be conducted in four tranches i.e. 2005, 2007, 2009 and 2010.
• ASEAN-6 and China is required to reduce tariffs to 0-5% on 40% of their products by 2005 and 60% of their products by 2007.
• Extended timeframe for tariff elimination of up to 2012 will be given for not more than 150 tariff lines. Malaysia 's 150 tariff lines include:
  - polyethylene, polypropylene and polystyrene;
  - rubber tyres and tubes;

• Products in the Sensitive Track are divided into Sensitive List (SL) and Highly Sensitive List (HSL).
• Duties for Sensitive List will be reduced to 20% by 2012 and to 0-5% by 2018.
• Duties for Highly Sensitive List will be reduced to 50% by 2015. No further tariff cut commitments.
• Malaysia has 361 products in the Sensitive Track, of which 265 are in the SL and 96 in the HSL. Products in the Sensitive Track include:
  - unprocessed agriculture products
  - tobacco products;
  - plywood;
  - ceramics and glass;
  - iron and steel; and
  - automotive products.

Rubber and Rubber Products

• What are the rubber and rubber products under the EHP?
  • Articles of rubber – eraser
• Date of implementation: 1 January 2004
• Date of fully eliminated: 1 January 2006

• What are Rubber Products under NT list?
  • Those which are not listed under EHP and Sensitive List (SL) are listed under NT list.
• Date of implementation: 1 July 2005
• Date of fully eliminated : End of year 2010
• How are the rates to be reduced / eliminated? See modalities
• Modalities for ASEAN 6 and China

  Tariff Rate (X)	2005	2007	2009	2010
  X = 20	20	12	5	0
  15 = X< 20	15	8	5	0
  10 = X < 15	10	8	5	0
  5 < X < 10	5	5	0	0
  X = 5	Standstill	0	0

• Threshold :
  

  (a)	40% at 0-5% in 2005
  (b)	60% at 0-5% in 2007
  (c)	100% at 0% in 2010 (tariffs on some products, not more than 150 lines, will be eliminated by 2012)

• Sensitive Track can be further classified into Sensitive List (SL) & Highly Sensitive List (HSL)
• What are Rubber Products under Sensitive Track?
  • Malaysia: rubber products 26 lines (HS 6-digits)
  • China: all the natural raw rubber lines (HS 4001) in HSL, & one line for Synthetic Rubber (4002 19 19) China’s Sensitive List (Rubber)

    No	HS Code (Year 2004)	Product Description	MFN
    1	4001 10 00	Natural rubber latex	20
    2	4001 21 00	Smoked sheet of natural rubber	20
    3	4001 22 00	Technical specified natural rubber	20
    4	4001 29 00	Other natural rubber	20
    5	4002 19 19	Styrene-butadiene/carboxylated styrene-butadiene rubber, in primary forms	7.5

• Date of implementation: 1 July 2005
• How are the rates to be reduced? See modalities
  • SL: the applied MFN tariff rates of SL are to reduce to 20% not later than 1 Jan 2012 and further reduced to 0 – 5% not later than 1 Jan 2018.
  • HSL: the tariff rates shall reduce to not more than 50% in Jan 2015
• What are the conditions governing the Sensitive Track
• Reciprocity:
  1. the tariff rate for a tariff line placed by a party in the Sensitive Track must be at least 10% or below in order for that Party to enjoy reciprocity;
  2. the reciprocal tariff rate to be applied to a tariff line placed by a Party in the Sensitive Track :
     1. shall be either the tariff rate of that Party’s tariff line, or the Normal Track tariff rate of the same tariff line of the other Party or Parties from whom reciprocity is sought, whichever is higher; and
     2. shall in no case exceed the applied MFN rate of the same tariff line of the Party or Parties from whom reciprocity is sought.

Tariff Reduction Schedule

• Malaysia
• China

Rules of Origin

• Back-to-Back Certificate of Origin arrangement to facilitate exports of partial shipments, of which the bulk-break activities are conducted in an intermediate ACFTA party; and
• Third-Party reinvoicing arrangement, whereby sales invoice to the importer are allowed to be issued by companies located in a non-ACFTA territory.
• ASEAN and China has also adopted Product Specific Rules (PSR) for the following products:
  • textiles and apparel;
  • plastic products;
  • footwear products;
  • iron and steel products;
  • preserved fish canned products;
  • palm oil and ice cream; and
  • jewelry product.
• With the adoption of PSR, ASEAN and Chinese exporters/ manufacturers now have the flexibility of choosing the most convenient rule in meeting the origin criteria of the products i.e., either 40% Regional Value Content (RVC) or PSR, in order to enjoy the ACFTA preferential rate.

Related forms in relation to export to China using the ACFTA arrangement can be downloaded by clicking on ACFTA Forms. Notice: Recognition of New CO Form E in http://www.miti.gov.my

Malaysia-China Bilateral Trade

• In 2011, Malaysia’s export of rubber and rubber products to China were valued at RM10.40 billion, an increase of 37.38% from RM7.57 billion in 2010.


• In 2011, Malaysia’s import of rubber and rubber products from China were valued at RM1.17 billion, an increase of 34.40% from RM0.87 billion in 2010.

• Our market share of natural rubber (NR) in China:
  

  Year	Market Share (%)
  2004	23.95
  2005	26.55
  2006	21.21
  2007	19.13
  2008	15.08
  2009	10.96
  2010	13.43
  2011	15.34

• In 2011, Malaysia’s export of natural rubber to China was valued at RM5.71 billion (408,597 tonnes), an increase of 64.47% from RM3.47 billion (347,668 tonnes) in 2010.


• Major natural rubber exported in 2011:
  • SMR 20 valued at RM4.70 billion (336,320 tonnes);
  • SMR 10 valued at RM0.40 billion; and
  • Latex valued at RM0.04 billion.
• Major natural rubber exported in 2010:
  • SMR 20 valued at RM2.92 billion;
  • SMR 10 valued at RM0.55 billion (39,337 tonnes); and
  • TSNR grade 5 valued at RM0.14 billion (10,127 tonnes).

• In 2011, Malaysia’s import of natural rubber was valued at RM2.34 million (2,344 tonnes), a decrease of 24.71% from RM3.11 million (311 tonnes) in 2010.


• Major natural rubber imported in 2011:
  • Rubber smoked sheet valued at RM1.12 million (80 tonnes);
  • TSNR grade 20 valued at RM 0.92 million (60 tonnes); and
  • Latex concentrate valued at RM 0.31 million (34 tonnes).
• Major natural rubber imported in 2010:
  • RSS 3 valued at RM1.15 million;
  • Other SMR 5 valued at RM 0.99 million; and
  • Other natural rubber valued at RM 0.58 million.

Rubber Products

• In 2011, Malaysia’s exports of rubber products to China were valued at RM0.54 billion, an increase of 3.15%, from RM0.52 billion in 2010.


• Major rubber products exported in 2011:
  • Thread and cord worth at RM0.26 billion,
  • Gloves, mittens and mitts, other than surgical worth at RM0.12 billion, and
  • Hygienic or pharmaceutical, sheath contraceptives worth at RM0.04 billion.
• Major rubber products exported in 2010:
  • Rubber; Vulcanised, Thread And Cord worth at RM0.28 billion,
  • Rubber; Vulcanised (Other Than Hard Rubber), Gloves, Mittens And Mitts, Other Than Surgical worth at RM0.09 billion, and
  • Rubber; Vulcanised (Other Than Hard Rubber), Hygienic Or Pharmaceutical, Sheath Contraceptives worth at RM0.03 billion.

• In 2011, Malaysia’s imports of rubber products from China were valued at RM0.91 billion, an increase of 21.82%, from RM0.75 billion in 2010.


• Major rubber products imported in 2011:
  • Sports footwear; other than ski-boots, cross-country ski footwear and snowboard boots, with outer soles and uppers of rubber or plastics worth at RM0.10 billion,
  • Footwear; other than covering the ankle, with outer soles and uppers of rubber or plastics worth at RM0.10 billion, and
  • Other than sports footwear; with outer soles of rubber or plastics, uppers of textile materials worth at RM0.07 billion


• Major rubber products imported in 2010:
  • Sports Footwear; Other Than Ski-Boots, Cross-Country Ski Footwear And Snowboard Boots, With Outer Soles And Uppers Of Rubber Or Plastics worth at RM0.14 billion,
  • Footwear; Not Elsewhere Specified In Heading 6402, Other Than Covering The Ankle, With Outer Soles And Uppers Of Rubber Or Plastics worth at RM0.06 billion, and
  • Footwear; Other Than Sports Footwear; With Outer Soles Of Rubber Or Plastics, Uppers Of Textile Materials worth at RM0.06 billion