Australia and Malaysia aim for free trade deal within 12 months

Mar 3, 2011, 4:20 GMT

Sydney - Prime Minister Julia Gillard said Thursday she expected to sign a free trade agreement (FTA) with Malaysia within 12 months.

Gillard was speaking in Canberra after a meeting with Malaysian Prime Minister Najib Razak, on his first visit to Australia since taking over the leadership in April 2009.

'We have determined today that we'll conclude this free trade agreement between our two countries within the coming year, and we want to see it concluded and signed before the anniversary of this visit next year,' Gillard said after talks with Najib in Parliament House.

Negotiations over an FTA began in 2005 but have been deadlocked since 2007. Australia has similar agreements with New Zealand, Singapore, Thailand and the United States, and hopes to seal deals with Japan and China as well as Malaysia.

Gillard said Najib had pressed her on expediting talks to liberate trade, worth 10.6 billion US dollars last year.

'I've agreed that that's a good idea,' Gillard told reporters.

Najib, who flanked Gillard at a joint press conference, said setting a deadline would help break a deadlock.

'We both agree that it would be useful to set a certain timeline,' he said.

Najib resisted Gillard's plea that he endorse her proposal for a regional processing centre for asylum-seekers to be set up in East Timor.

The idea has gone nowhere since Gillard proposed it, not least because it received a cool reception in Dili and in Jakarta.

Malaysia is one conduit for asylum-seekers, mostly from the Middle East, who then enter Indonesia to board fishing vessels for their passage to Australia.

'With respect to a processing centre, this is a regional initiative, and I believe this will be discussed in Bali,' Najib said. 'We need a bit of time to study the Australian proposal but we will be as positive as we can.

'We are to take a reasonable outlook first and we'll be as cooperative as possible.'

Najib stressed that Malaysia had taken steps to combat people-smuggling, including stopping boats from leaving its shores.

'We've amended the Human Trafficking Act in Malaysia and we've increased the penalties. The penalties are now very severe,' he said.

'Secondly, we've also stepped up our interdiction. There've been many instances of people having been interdicted in Malaysia before they move on to Australia. I think that kind of cooperation will continue.'

In 2005, Abdullah Badawi, Najib's predecessor, became the first Malaysian leader to visit Australia in 21 years. Bilateral relations have improved since then.

Gillard visited Malaysia late last year.

More than 250,000 Malaysians have attended universities in Australia, with around 20,000 currently enrolled. More than 500,000 Australians visited Malaysia last year, mostly on holiday.

Najib thanked Australia for looking after the welfare of Malaysians affected by the floods that hit Queensland at the beginning of the year. More than 200 Malaysians studying in Brisbane were affected, including a group who lost all their possessions to the rising waters.

'You've got a great sense of volunteerism and you've been very, very positive, including helping Malaysian students,' Najib said. 'I'd like to say how grateful we are.'

Read more about Australia Diplomacy

Read more about Malaysia