What the Malaysian FTA means for NZ business

But New Zealand companies which have the foresight to capitalize on the FTA’s ‘first-mover’ advantages may find Malaysia both a valuable market in itself and a  springboard for the giant South-East Asian market.

Government officials inevitably pump-up the improved market access, greater transparency and security for goods and services providers as the key wins from the FTAs which New Zealand has secured in recent years.

The Malaysian deal is no exception. But it is also about economic partnership.

Both sides are promoting the opportunities for their respective companies to partner-up in new fields like the green technology space.

And in education - which is a major focus for a Malaysian Government which is strongly focused on driving up the abilities of its people – there are potentially big gains waiting for New Zealand educationalists. Under the FTA, Kiwi education providers will ultimately be able to have up to 70 percent shareholding in the joint-ventures they might run with Malaysian counterparts at virtually all levels: primary, secondary and tertiary studies.

Given that New Zealand is already a prime destination for Malaysian international students (up 70 percent since 2003) the opportunities to also take a bigger role in steering local education through developing university programmes, e-learning solutions for Malaysia’s Smart Schools programme as well as professional development programmes are strong.

Be warned though: Malaysia is negotiating free trade deals with other parties, particularly Australia. So, the first-mover advantages may evaporate over time.

But the good news is New Zealand companies won’t miss out. The FTA contains ‘favoured nation’ clauses, which mean any advantages that other countries like Australia secure will have to be passed onto New Zealand.

The trade statistics are promising. Malaysia is already New Zealand’s second-largest trading partner in Asean and its eighth-largest export destination. Two-way merchandise trade between Malaysia and New Zealand reached an estimated $3 billion in 2008.

The Malaysian FTA has quickly raised New Zealand’s profile as a good partner for Malaysian companies to do business with.

An early example is the determination with which Kiwi rugby entrepreneurs James Iverson and Robbie Yule leveraged Prime Minister John Key’s visit to Kuala Lumpur for the FTA signing ceremony to open doors for their fledgling rugby coaching business.

The pair credit NZTE’s Escalator programme for getting their company NZRugby Resources off to a flying start and the added profile from the PM’s visit as boosting their credibility with the Malaysian Rugby Union and a potential market of 35,000 Malaysian rugby players.