The Malaysia-Turkey Free Trade Agreement (MTFTA) that came into effect on 1st of August 2015, was the culmination of negotiations that started in May 2010. The hard work of the two governments has led to the reduction of tariffs. Both Malaysia and Turkey will eliminate and bind duties on 70% of the tariff lines, upon entry into force of the Agreement and after a period of eight years, duties will be reduced or eliminated for almost 86% of tariff lines.
For Malaysia, Turkey with a population of 74 million people represents vast market potential, Malaysian corporate players already in Turkey include Malaysia Airports Holdings Bhd, which owns the Istanbul Sabiha Gokcen International Airport; and IHH Healthcare Bhd, which counts Turkey as one of its biggest markets.
For Turkey, Malaysia becomes a gateway market to the wider ASEAN market which has over 600 Million population and a growing middle class that requires a wide range of goods and services. The Turkish ICT and Innovation sectors could be one of the real beneficiaries of the FTA, for years Turkey has been competing with European technology companies and with an obvious cost advantage they make for perfect partners for Malaysian companies looking to expand.
In 2014, total trade between Malaysia and Turkey amounted to USD$969million. Malaysia’s exports to Turkey totaled USD$752million, while imports amounted to USD$217million. Key exports to Turkey comprise textiles & clothing, chemicals & chemical products, palm oil, manufactures of metal, rubber products, electrical and electronic products. Imports from Turkey include textiles & clothing, machinery appliances & parts, iron & steel products, chemicals & chemical products, other agriculture produce, electrical and electronic products.
In a recent press release Dato’ Sri Mustapa said in urging Malaysian businesses in these sectors to ramp up their exports to Turkey. “Malaysian exports that will benefit from immediate duty-free treatment in Turkey include selected textiles and apparel, E&E products, chemicals, iron and steel products, machineries, wood products, leather products and all rubber products,”
For palm oil and palm products, Turkey has offered a one-off duty reduction of 30% from the current MFN rate (0-46.8%). “Reduction of duties on these products essentially mean that Malaysian palm oil and palm products are placed at a competitive advantage in the Turkish market, over similar products originating from other countries,”
During the signing of MTFTA in April 2014, the Prime Ministers of Malaysia and Turkey set a target of USD$5bil in total trade by 2020. The implementation of the FTA is expected to help the countries to achieve that.
The Malaysia Global Business Forum will continue to support the development of trade and investment between Malaysia and Turkey. To learn more about how to meet incoming Turkish ICT and Technology Innovators looking to expand into the Malaysian Market contact our team today.
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Upcoming Events
MGBF founding chairman Nordin Abdullah and UMW Toyota president Datuk Ravindran K. will delve into the convergence of automotive innovation and environmental sustainability in Penang, Sarawak, Johor and Pahang.
Hosted by menumiz™ – an end-to-end restaurant management system – this roundtable will feature a case study presentation and a panel session to discuss the latest digital trends, challenges, and opportunities within the food and beverage sector.
In this episode of 'A Working Lunch with Nordin', MGBF's founding chairman, Nordin Abdullah, will host this discussion focusing on the biggest threats and opportunities for businesses as we look to manage change in the South China Sea.
This MGBF Roundtable will focus on regional food security issues and trends in the regional supply chain, and trade regulations and policies, including a new geopolitical tool i.e., weaponisation of supply chains.
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